Partnering and service gives Beazley an edge in cyber market
Adding a service element to a product can be an excellent way to differentiate from competitors, as can developing the right partnership on certain products, Patrick Hartigan, team leader of the treaty team at Beazley, told PCI Today.
Beazley has been selling a cyber product for around 15 years, initially to hospitals and healthcare providers, but over the last three years retailers and banks have focused on it too, building up a significant momentum.
“We differentiate ourselves by providing a service element with our breach response product. Until now, there hasn’t really been a product in the market that fulfils the service element and has the required limit for certain carriers,” explained Hartigan.
Earlier this year, the insurer partnered with the corporate insurance unit of Munich Re to offer protection for the digital assets and IT infrastructure of the world’s largest companies.
The partnership offers clients up to $100 million of protection for a wide range of cyber risks. Based on the individual needs of clients, coverage can be tailored to include elements for risks such as: hacking or malware attacks, distributed denial of service (DDoS) attacks, cyber extortion and property damage and bodily injury exposures deriving from malicious cyber attacks.
Hartigan said that the partnership allows the companies to combine Munich Re’s intellectual capacity and significant distribution with Beazley’s product knowledge.
“This combination provides a much larger limit, giving us greater appeal. We’re now providing on an insurance basis, an embedded basis and a reinsurance basis, mainly through quota share,” he explained.
As cyber attacks become more elaborate, Hartigan believes that companies that might suffer those attacks are creating a much more sophisticated environment.
However, he warns that companies are not currently protecting themselves from cyber attacks well enough.
Turning his thoughts to the soft market, Hartigan said that he thinks only an aggregation of events will change the market, rather than an occurrence loss eroding capital.
He added that given the environment of low economic growth there are not too many growth opportunities on the reinsurance side.
“The industry must look very seriously at the distribution chain and the value that’s been added from the ultimate carrier to the ultimate risk,” he said. “There are perhaps too many links in the chain, with some of those links maybe not adding value.”
