Solution protects against silent cyber exposures with a long-term view to mitigate this risk using a combination of reinsurance, data & analytics
London, UK (Sept. 6, 2018) – Aon plc, a leading global professional services firm providing a broad range of risk, retirement and health solutions, is continuing its investment in cyber by creating new reinsurance capacity and launching its silent cyber* solution. This will protect insurance carriers from silent cyber exposures through reinsurance – underpinned by data and analytics from Aon’s Cyber Solutions and Guidewire – with the goal of mitigating the risk of the silent exposure in a carrier’s portfolio.
Over the last 18 months, a combination of regulatory attention and high profile attacks – including reports by the Prudential Regulation Authority (PRA) and European Insurance and Occupational Pensions Authority (EIOPA), and the far-reaching ransomware attacks NotPetya and Wannacry – have raised awareness of how cyber incidents can impact multiple lines of business. Carriers are now under increased pressure to identify, analyze and mitigate their exposures. However, challenges include locating the exposure, and developing scenarios that are both realistic and relevant to that carrier.
In response, Aon’s silent cyber solution is designed to partner with carriers in their journey to identify, quantify and mitigate the silent cyber risk by providing a clash solution** to reinsure the exposure in the interim period. Where the carrier chooses to provide affirmative cyber coverage going forward, Aon can arrange a reinsurance solution for that cyber exposure to sit across multiple lines of business.
The solution is supported by an analytical, end-to-end process to help insurers:
- identify their silent cyber exposures through wording and threat analysis;
- quantify their exposures using bespoke scenarios developed by Aon’s dedicated Cyber Analytics team, insights and scenarios from cyber security specialists within Aon’s Cyber Solutions, and cyber modelling provided by partner Guidewire and its Cyence Risk Analytics product, to establish credible risk levels;
- protect that silent exposure with a cyber clash reinsurance product;
- going forward, establish appetite and methodology to underwrite, price and reinsure affirmative cyber across multiple lines of business.
Working with key reinsurers in Bermuda, London and Europe, Aon has already sourced USD350m of capacity prior to launch. The goal is to help insurers obtain more clarity on their cyber exposures with the option to exclude or recognize the exposure in each portfolio, and evolve its reinsurance protections for cyber accordingly. This will create more efficient reinsurance structures, while empowering clients to strategically underwrite cyber risk across all lines of their portfolios with greater certainty.
Aon’s silent cyber solution reinforces the firm’s commitment to innovation in this space and follows last week’s announcement that Luke Foord-Kelcey has been appointed Global Head of Cyber Innovation for its Reinsurance Solutions business.
Luke commented: “Our process-led and forward-looking approach to assessing, quantifying and transferring silent cyber will lead to improved coverage, pricing and capacity through robust, modelled results and strong reinsurer partnerships. But most importantly, it is about how we end the ‘silence’, strengthen the cyber re/insurance market and make it future-proof with more transparency, opportunities for growth and enhanced protection across the value chain.”
* Silent or non-affirmative cyber refers to potential cyber exposures contained within other lines of business that do not explicitly exclude cyber as a peril, nor expressly include cyber coverage.
** According to the International Risk Management Institute, clash coverage is a type of reinsurance designed to protect an insurance company from the loss of its normal reinsurance recoveries when it is faced with multiple claims from multiple insureds arising out of the same catastrophe and where its reinsurance does not fully reimburse the insurer for these related losses.
Aon plc (NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.
Aon announced in May 2018 it will retire the business unit brands of Aon Benfield and Aon Risk Solutions, which follows the retirement of the Aon Hewitt business unit brand in 2017. This move was designed to increase the rate of innovation across the firm and make it easier for colleagues to work together to bring the best of Aon to clients. Aon has five specific global solution lines: Commercial Risk Solutions, Reinsurance Solutions, Retirement Solutions, Health Solutions and Data & Analytic Services.
Source: AonTags: Aon, Cyence, Guidewire, partnership, silent cyber risk