Canadian Underwriter

Aon announces alternative cyber risk transfer approach

January 24, 2017   by Canadian Underwriter

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Aon Global Risk Consulting announced on Tuesday its Cyber Captive Program, which guides companies through a series of steps to help identify, assess and quantify their cyber exposures – “ultimately making more informed decisions around risk retention in a captive as well as providing broad form risk transfer capacity of potentially up to US$400 million.”

computer securityAon Global Risk Consulting, the risk consulting business of Aon plc, said in a press release that the program consists of:

  • Aon Cyber Resilience Review, which will help identify, assess and quantify cyber risk;
  • Comprehensive coverage through the Aon Cyber Enterprise Solution form, covering broad cyber exposure;
  • Consistent comprehensive coverage with significant capacity of potentially up to US$400 million per policy;
  • An underwriting process that facilitates an improved overall understanding of the risk; and
  • Captive participation on a direct or reinsurance basis.

To access the solution, each insured is required to undergo the Aon Cyber Resilience Review. Policy limits are available up to potentially US$400 million in capacity per policy excess of US$25 million.

Aon noted in the release that while cyber is one of the fastest growing risks for companies across the globe, the cyber risk transfer market has historically been characterized by a challenging underwriting process where cyber risks are difficult to identify and quantify. “Building a large tower of limits can be hampered by differing policy terms and conditions and dislocation of rates at different layers in a program,” the company said. “Additionally, many organizations facing cyber risks that can result in physical impacts, such as property damage and business interruption, agree that a more comprehensive approach to cyber risk is needed.”

Peter Mullen, chief executive officer of Aon Captive and Insurance Management, said in the release that “based on the challenges in the traditional market, Aon developed this solution to provide clients with a comprehensive risk transfer option that they can access through a captive. The solution will ultimately allow captive owners the opportunity to take a hard introspective look at their cyber risk profile, identifying important issues and threats for their organization and placing comprehensive coverage through the Aon Cyber Enterprise Solution.”

Aon’s Cyber Captive Program is the firm’s latest cyber offering. Last September, Aon launched Cyber Risk Solutions, an insurance policy that offers comprehensive and integrated enterprise-wide coverage against cyber risk. At the time, Aon said that the wording on the insurance policy was proprietary to Aon and could cover property damage arising out of a network security breach.

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