Descartes launches parametric cyber offering for French SMEs

Descartes, the Paris-based parametric underwriting agency, is expanding into the cyber insurance market through the launch of its first parametric cyber offering in France, aimed at small-to-medium enterprises. The group, which is led by co-founder and former AXA senior executive Tanguy Touffut and has grown impressively since launch in 2018, said that the solution is built from the same data-driven standards of excellence as its core natural perils solutions. Descartes will use its own proprietary cyber risk model to help SMEs, particularly in the manufacturing and retail sectors, cope with the ever-rising risk of ransomware attacks. “Descartes’ cover addresses the concerns of finance and information system security departments to protect their critical assets in the event of a cyberattack, which can not only impact their information systems, but also generate significant operating losses due to business interruption,” said the company. Descartes has built up one of the world's largest teams of researchers and modellers specialising in natural perils. It said its research team is constantly expanding and is working on solutions for other difficult to transfer risks. “We build solutions for what is difficult to insure. Since 2018, we have seen that the parametric insurance model is uniquely primed to effectively protect companies against climate risks. We are now looking to apply this know-how to one of the other major threats facing businesses: cyber risk,” said Touffut. The firm said the launch of its parametric Cyber Shutdown Cover in France demonstrates its ambition to gradually extend its scope to emerging risks beyond natural hazards. Touffut added: “Data and algorithms are at the heart of our business model. This is a momentous milestone for our company, as it marks the beginning of entry into new verticals linked to emerging risks.” Despite the ever-rising cyber threat, take-up of cyber cover among SMEs in France, as elsewhere in Europe, remains low. Descartes pointed to the recent French risk management association (AMRAE) study that found that nine out of ten SMEs were not insured against cyber risk in 2022. “Yet a ransomware attack generates an average 21-day business shutdown, with an estimated daily operating loss of €800,000. Following a cyber encryption attack, companies must mobilise considerable resources to diagnose the attack, restore its information system and restart business operations,” said Descartes Descartes said it can apply its expertise in parametric models to cybersecurity, to assesses a company’s vulnerability and define in advance with the customer and their broker a compensation amount per day for business interruption. As a result, the proposed insurance policy offers coverage adapted to the financial cost of business shutdown, customised according to the policyholder’s profile, and the possibility of being compensated within a record time after an encryption attack, it explained. “Thanks to our parametric models, we help customers calculate the amount of their financial losses in the event of business interruption, as soon as they take out the policy. This predefined parameter, combined with a very simple contract, enables us to intervene immediately after the attack. Thus drastically reducing its impact, especially considering that we can compensate our customers within three weeks of the resumption of activities, when traditional insurance requires several months before confirming coverage levels,” said Louis Bollaert, chief commercial and marketing officer at Descartes. “In a world turned upside down by climate change and the emergence of new risks, our ambition is to take 5% of the French cyber insurance market within the next 18 months,” added Bollaert. France and the wider EU community is stepping up efforts to bolster defences against cyber. Descartes therefore sees a rise in demand coming for simple, effective and tailored solutions that truly reflect risk management and investment among the SME community. “With the upcoming implementation in October 2024 of the NIS2 directive, which aims to strengthen the cyber maturity of European companies, Descartes’ Cyber Shutdown Cover provides unequipped businesses with an innovative solution tailored to their key assets. This model is also relevant for companies that have already been the target of attacks. In fact, Descartes’ Cyber Shutdown Cover supports businesses that have suffered a loss in the last 18 months. Unlike traditional models, we enhance the value of the cybersecurity investments made following an attack, by directly reflecting mitigation measures in the design of the cover offered,” explained Léopold Larios, cyber director at Descartes.

Descartes launches parametric cyber offering for French SMEs

Firm aims to take 5% of French cyber market within 18 months

Want to read this article?

Read Next

Multinationals in China to enjoy relaxed data transfer rules

Coface names country manager for Italy

IASB meets in China to discuss climate reporting

‘Pressure rising’ on developing Asian aging risk: ADB

European business confidence in China plummets

Multinationals in China to enjoy relaxed data transfer rules

Coface names country manager for Italy

IASB meets in China to discuss climate reporting

‘Pressure rising’ on developing Asian aging risk: ADB

European business confidence in China plummets

Want to read this article?

Read Next

Multinationals in China to enjoy relaxed data transfer rules

Coface names country manager for Italy

IASB meets in China to discuss climate reporting

‘Pressure rising’ on developing Asian aging risk: ADB

European business confidence in China plummets

Related Articles