September 28, 2016 by Canadian Underwriter
Aon plc announced Wednesday its Cyber Enterprise Solution, suggesting that the policy wording on the insurance policy is proprietary to Aon and could cover property damage arising out of a network security breach.
Aon Cyber Enterprise Solution “can address emerging areas of cyber risk and related regulation,” London-based Aon said in a release.
One such area is “business interruption and extra expense coverage arising out of a systems failure.”
With the insurance, Aon will “broaden the scope” of cyber insurance “to help clients across all industries develop a more comprehensive approach to cyber risk, including physical property damage, products liability, business interruption or supply chain disruption,” stated Christian Hoffman, Aon Risk Solutions cyber practice leader, in a release.
The Cyber Enterprise Solution is “available on a global basis,” an Aon spokesperson told Canadian Underwriter. It was not clear which carriers would be writing the coverage for Canadian clients.
The limit is up to US$400 million per policy and includes a “single policy form” with “Aon proprietary language.”
Coverage includes product liability “to address Internet of Things exposures” and contingent network business interruption for information technology vendors, Aon added.
Other risks that it addresses include cyber terrorism and “media liability and technology errors and omissions by endorsement.”
Cyber-related coverage “represents a significant growth opportunity” for property and casualty insurance carriers, Fitch Ratings Inc. stated in an earlier report.
In that report – U.S. Cyber Insurance Market Share and Performance – Fitch said the direct loss ratio for cyber stand-alone business in 2015 was 65.2%.
“Industry estimates suggest that the global cyber insurance business could increase to $20 billion by 2020, but the lack of information on cyber insurance is a challenge for insurance companies, policyholders, regulators, and investors to evaluate and price risk,” Fitch Ratings managing director James Auden stated in an Aug. 24 press release. “Challenges in isolating cyber related premiums and exposures from other risks within a package policy create limitations in analyzing the supplemental filing as total cyber insurance premiums are likely understated.”
In its report, Fitch analyzed “data from a new 2015 statutory supplement to compile company and industry statistics on cyber insurance.”
American International Group Inc., Chubb Ltd. and XL Group plc have 22%, 12% and 11% of the market, Fitch said at the time. Chubb was renamed from ACE Ltd. after ACE completed its acquisition of The Chubb Corp.