Growing demand for global cyber insurance programmes to counter cross-border threat

Multinational cyber insurance programmes are in their infancy, but interest is growing and longer term they should help companies manage an increasingly global threat. Corporations are increasingly exposed to cross-border cyber risks through extended supply chains, the growing importance of third-party vendors and mounting international data protection and privacy laws, according to a new whitepaper by Chubb. This will increasingly require risk and insurance managers to engage with different parts of the business and external experts, and potentially develop more comprehensive global programmes. Global programmes for cyber risk are still in their infancy, but demand is growing and insurers are looking to develop solutions, Jared Concannon, major accounts segment leader at Chubb told CRE this week at Airmic’s conference. Currently, some companies buy global cyber policies, but true global programmes for cyber risk require local policies and servicing, including breach response, he explained. “As cyber risks evolve and do not discriminate among national borders, the value of local cyber policies with commensurate claims and response services cannot be underestimated,” Chubb says in its whitepaper. “Local policies tailored to local regulations and terms and conditions consistent with locally acceptable customs and practices, are prudent for effective local coverage… A broad global umbrella master policy providing drop-down coverage to fill gaps for differences in conditions and local limits brings efficiency in pricing and needed capacity,” it adds. Demand for global cyber programmes is increasing, according to Karen Gorman, head of global services and solutions GB at Willis Towers Watson. Limited cyber programmes covering key markets like the US and Europe are possible, but insurers are now looking to build out underwriting and servicing capabilities in local markets, she said. According to Chubb, cyber threats are diverse and ever-changing as global organisations become increasingly reliant on technology and data. At the same time, multinational organisations are increasingly exposed to cyber-related regulation, including sector-specific cybersecurity rules and increased data protection laws. In addition to the EU’s stringent General Data Protection Regulations (GDPR), Canada and Australia are bolstering privacy rules and have recently introduced mandatory data breach regimes. California is also introducing tougher privacy rules, mirroring aspects of the GDPR. In some cases, such as with the GDPR, these laws have extra-territorial reach, creating exposures for organisations in markets where they may not have physical operations. National data protection laws also typically restrict the transfer of data overseas, while a growing number of bilateral agreements govern such practices. “A multinational company's cyber preparedness extends beyond ensuring its IT systems are secure and robust or guarding against the vulnerabilities of third-party vendors or supply chain risks. A global company must also be aware of the relevant legislative requirements for data protection in the countries they operate and understand their main obligations,” Chubb says in its whitepaper. “Risk managers and data protection officers of global companies need to ensure that policies are in place, data protection impact assessments are carried out and training is provided to staff so that the legal requirements are properly understood,” it adds. Staying ahead of the “evolution curve” in cyber liability will be challenging for multinational companies, continues Chubb. It is vital that global organisations can access a multidisciplinary team of experts to analyse the evolving threat landscape and regulatory regimes, it adds in its whitepaper. Companies also need help to understand the evolving scrutiny of a multinational company’s data privacy standards, the insurer says. According to Chubb, it is “imperative” that risk managers maintain engagement with key stakeholders throughout a business, to map out future cyber-related exposures their organisation may face. “The difficulty in keeping pace with changes in the technologies a business uses, and the various global regulations that govern them, highlights the value of consulting with a broad spectrum of internal and external experts who can counsel and direct how to structure a robust and flexible risk transfer multinational cyber insurance programme,” the insurer adds in its whitepaper.

Growing demand for global cyber insurance programmes to counter cross-border threat

Want to read this article?

Read Next

Insurtech partners with USAID on climate adaptation programme

ICEYE in data collaboration with Juniper Re on flood and wildfire

Senior appointments in Lockton’s crisis management team

European rates up overall but financial and cyber lines falling: Marsh

European Parliament approves regulation to tackle forced labour

Insurtech partners with USAID on climate adaptation programme

ICEYE in data collaboration with Juniper Re on flood and wildfire

Senior appointments in Lockton’s crisis management team

European rates up overall but financial and cyber lines falling: Marsh

European Parliament approves regulation to tackle forced labour

Want to read this article?

Read Next

Insurtech partners with USAID on climate adaptation programme

ICEYE in data collaboration with Juniper Re on flood and wildfire

Senior appointments in Lockton’s crisis management team

European rates up overall but financial and cyber lines falling: Marsh

European Parliament approves regulation to tackle forced labour

Related Articles