Maersk calls for more cyber cover in traditional P&C policies

Danish shipping and logistics company Maersk has recently purchased standalone cyber insurance for the first time, but is urging P&C insurers to remove cyber exclusions from traditional covers to simplify things for buyers. Maersk was one of the highest profile casualties of the NotPetya malware attack in June 2017, which caused major disruption at more than 70 of the company’s ports and terminals. The company has indicated that business interruption and additional workaround costs associated with the attack could cost $250m to $300m. Speaking at an Advisen cyber risk conference in London this week, Henriette Scotwin Guespereau, lead risk adviser at Maersk, revealed that the company has since purchased standalone cyber insurance. However, she criticised the insurance industry for not including more cyber risk cover in traditional P&C coverages. As part of the Buyer’s Perspective discussion panel, Ms Scotwin Guespereau explained that Maersk was already examining its cyber risk cover at the time of the NotPetya attack in June last year. The company had been looking to buy standalone cyber insurance, but it was also pushing traditional insurers to provide some cyber cover under traditional P&C policies. Maersk’s management was initially not interested in buying standalone cyber insurance, according to Ms Scotwin Guespereau. “Some felt that we should spend [the premium] on more information security measures,” she said. “At Maersk, we had overlooked the cyber insurance market for some years, but with digitalisation it made sense to begin looking at cyber insurance,” she added. The shipping company had begun the process of buying cyber insurance before last year’s ransomware attack, looking to purchase a smaller limit to test how the cover would respond. But after the NotPetya attack, Maersk decided to purchase higher limits than it originally envisaged, according to Ms Scotwin Guespereau. In addition to purchasing standalone cyber insurance, Maersk has also had conversations with its P&C insurers but found they are reluctant to remove cyber exclusions. The company sees value in buying standalone cyber insurance for system failure to cover loss of revenues, explained Ms Scotwin Guespereau. However, Maersk would like to have cyber covered as a peril under its P&C insurance, to avoid resorting to two different policies following a cyber incident, she said during the panel debate. “We are not comfortable with cyber still being in silos. We want [the different lines of business] to work together and we want insurance to bridge the gaps,” Ms Scotwin Guespereau said. According to Ms Scotwin Guespereau, an all-risk P&C policy should include cyber. However, the extent of cover should reflect the exposure, she said. “If [the cyber exposure] is low risk then we believe that it should be included for free, but if it is a high exposure we accept there may have to be an additional premium,” said Ms Scotwin Guespereau. Buyers do not want the uncertainty of not knowing which policy will respond to a cyber incident, according to Elizabeth Queen, vice-president, risk management at Dutch information services company Wolters Kluwer, who also took part in the panel. Over time, Wolters Kluwer developed its cyber insurance cover to sit alongside its professional and media liability cover, she explained. “Tailor your programme to fit your own risk profile,” said Ms Queen. “We all need it, but how you craft it is up to each company.” Jeremy Harvey, vice-president of group insurance at Barclays, said insurance buyers will have to deal with combining cyber and P&C coverages for now. However, over time the market could move to include cyber perils in traditional coverages, he said during the panel debate. “We constantly evaluate policies and carry out gap analysis,” added the insurance buyer. Mr Harvey also experienced some scepticism from management at Barclays before it recently purchased cyber insurance for the first time in 2017. However, this scepticism was for the “off-the-shelf-product”, he explained. To sell the concept, Mr Harvey had to explain to management that bespoke cyber insurance wordings are available.

Maersk calls for more cyber cover in traditional P&C policies

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