Cyber risk insurance has been a major theme at this year’s AIRMIC conference for insurance buyers and sellers, and FM Global is an insurer taking a lead on the risk.
Whereas standalone cyber coverage is available in limited form and quantity, the mutual insurer is taking a lead in offering cyber risk extensions for its property all risks covers.
Peter Solloway, FM Global’s regional sales manager for Northern, Central Europe and EMEA chemical, told Reactions the company was focused on large risks and its approach underlined its underwriting culture as a mutual insurer.
“We’re even-handed and we want to expand our products and services to all our members,” he said, speaking at the event being held in the spa town of Harrogate in the north of England.
“For Property all risks, first party cyber is included, and that includes denial of service attack,” said Solloway.
Cyber extensions are being offered by the insurer on core property flood and fire risk cover.
“We’ve led the market in the scope of our property cover. We’re doing that now by continually looking at ways of expanding covers,” said Solloway.
“When people think cyber, they think data, but it can be more tangible; it can stop production, for example,” he said.
He noted that FM Global had already paid a claim arising from data corruption within a company’s manufacturing systems software, in a denial of service attack that caused disruption to production.
“Cyber is top of my concerns, and in the minds of risk managers. The cover and the resilience is not there,” said Solloway.
“Communicable disease cover
“Our policyholders constantly push us to be as broad as we can be to their benefit,” said Solloway.
“We’re not seeking to exclude. That’s to do with our ethos as a mutual. It’s not just about the ability but also the willingness to pay,” he said.
Clients in mind for such large risk covers tend to have around £500m revenues, with premium at averaging £1m, said Solloway.
Most industries are getting more and more dependent on Cloud computing services, he suggested.
“However, it’s important to remember that it is still a massive piece of hardware somewhere, that isn’t immune to risk,” he said.
“We’re making use of so-called big data to look more deeply into where you are most pre-disposed to sustain a loss,” said Solloway.
The firm runs a resilience index, he said, an annual ranking of countries’ logistical scores, designed for use by companies deciding on locations for acquisitions or basing assets such as production centres.
It looks at the effects that oil shortages could have on a local economy, the quality of local transport networks, traffic and corruption levels, and a risk quality database giving countries scores by a range of diverse risks.