AIG Cyber Risk Insurance: From Hype to compulsory Practice for all Entrepreneurs

In a world overloaded with data and information systems, cyber risks are part of everyday life. They range from the loss of data on laptops to risks in connection with cloud computing. They may also include so-called denial-of-service attacks or interruptions of a web presence. The risks are increasingly spreading to more business areas and becoming more and more complex. Today, they constitute a growing danger for each and every company because each business that saves, processes or transfers data, is exposed to the electronical and physical risk of losing data.

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While insurance companies and brokers were often met with a lack of understanding and disinterest when they brought up the subject of cyber risk transfer solutions with enterprises in 2012 to 2014, the situation has changed dramatically. New technologies, continuously growing volumes of data and increasingly complex hardware accelerate the demand for adequate insurance solutions.

We are faced with a continuously growing number of reports on cyber damages (encryption of data, DDoS attacks, breaches of data confidentiality and associated blackmail attempts). The probability for a company to become the target of such an attack keeps growing. According to the “2016 Risk: Value Report” by NTT Com Security, the executives of 65 percent of the surveyed companies were convinced or relatively sure that their company will experience a security incident in the future.

Even though only a small number of companies in Europe has so far taken out insurance against such risks (source: Lloyd’s of London, February 2015), our experience shows that, despite a high risk sensitivity, most of them don’t really know the actual risks to which they are exposed.

In the meantime, hedging against cyber risks and associated risk transfer solutions have long become compulsory practice for risk managers. To give an example: While we received only up to 5 requests for cyber risk insurance per week in 2013, we are now getting 10 requests a day. This development and the concomitant necessity to provide information on the subject is also taken up by brokers and reflected, for example, in the significantly increasing number of participants in the current presentations on cyber risk insurance at our AIG Academy. We are one of the worldwide leading insurance companies for cyber risks.

Know-how is one of the key factors for successfully hedging a business against such risks. The German Insurance Association (GDV) has therefor set up a “cyber insurance work group”. Since 2015, this work group has developed a non-binding set of terms and conditions. AIG, as one of the worldwide leading insurance companies for cyber risks, has a wealth of experience which is reflected by its modular risk coverage, comprehensive services and the know-how and competence of our underwriters and claims teams. AIG is therefore actively involved in the GDV cyber insurance work group and provides the relevant technical expertise to the work group leader.

We have created a “Cyber Sales Playbook“ as a tool for obtaining a quick overview of and insights into this complex matter. It is an interactive document which allows brokers to efficiently familiarize themselves with the matter according to specific customer requirements.

With CyberEdge®, AIG offers a comprehensive risk management and insurance solution against the presented risks. CyberEdge combines insurance cover and risk management including direct access to specialized experts, and provides comprehensive protection for your company and your sensitive data in the case of a cyber security breach such as hacking, computer virus, sabotage or errors by employees as well as theft of trade information or customer data.

In a claims event, CyberEdge provides the following:

Direct, 24/7 access to an expert, as necessary.
Competent advice on how to handle the complex regulatory requirements plus resulting actions.
Comprehensive assistance for a correct communication to customers and affected parties.
Solid expert know-how on how to restore the IT infrastructure without delay, including analysis, immediate actions and the adequate solutions for resuming business operations.
State-of-the-art crisis management to protect image and reputation.
Identity and credit protection for the affected data sets.
Network of experienced experts for determining the claims sum and loss of income.
Experienced experts for cyber blackmailing incidents.

We are currently expanding our team of cyber experts to be able to provide the best possible service to our business partners.

Please contact our local Cyber Team for more information.