In Partnership with

Bringing cyber insurance back to basics

As the complexity and interconnectivity of the cyber-threat environment continue to grow, cyber specialists have a key message for the market: it’s time to bring cyber insurance back to basics

Chris McMurray

Travelers

Industry experts

Joe Tracey

CFC

Stephen Ridley

Aviva

Chris has been in the insurance industry for 20 years, working in that time with some of the largest specialist carriers in the market. Prior to joining Travelers, Chris was a cyber product manager covering UKI, continental Europe, Latin America, and Asia Pacific, providing expertise and gaining insight into cyber insurance markets worldwide. Chris joined Travelers Europe as cyber lead in 2022 and has recently advanced to his new role as managing director for Cyber. He is responsible for growing the cyber portfolio, ensuring its place in offering a market-leading product supported by first-class incident response and pre-loss service proposition.

Travelers Europe

Chris McMurray

Joe is responsible for strategically growing CFC’s cyber market share and leading development initiatives within the UK & EU. He joined CFC in October 2022 after spending a decade specialising in growth and development with market-leading organisations. Joe has a wealth of experience in commercial insurance, having designed and created new risk programs for both SME and corporate enterprises

CFC

Joe Tracey

Stephen is the head of cyber at Aviva. With 15 years of experience specialising in cyber and data risks insurance, from both a broking and underwriting perspective, he is both CISMP and CompTIA Security+ accredited. He currently sits on the cyber committee for the Association of British Insurers and the DCMS Cyber Advisory Group, and regularly speaks at industry events as well as being frequently featured in both the trade and national press.

Aviva

Stephen Ridley

“In most traditional insurance policies, the contract is a promise to pay in the event of an incident. But actually, a cyber policy is generally a promise to respond, not to pay”

Stephen Ridley, Aviva

DELINEATED BY the lurid headlines it provokes, the constant evolution of online threat actors, and the proactive stance it’s taken to protect policyholders, cyber insurance has clearly moved from “new kid on the block” to “one to watch.” The pace of change that sets the sector apart is showing no signs of slowing down, according to specialists from Aviva, CFC, and Travelers, who highlighted that amid changing trends in capacity, coverage, and pricing, it’s an exciting time to be in the UK cyber insurance market.

“Credibility is what any insurance product needs, and cyber is no different. And volatility in pricing, coverage capacity, deployment – they aren’t always helpful when we’re looking for that credibility”

Chris McMurray, Travelers Europe

“In terms of product evolution, we've seen a move from simple coverage and broad wordings, which have actually remained quite stable over the last 10 years – we chose the longevity of the product,” he says. “Then we moved into response costs to meet those risks that clients were facing and to hold their hands to get them back on an operational basis. “In recent years, we've moved on to additional services, such as proactive cyber. And that's a real big benefit for our broker partners and their clients. So I echo what Chris says – I think the cyber market in the UK is certainly key for growth, and we've pivoted toward the cyber as a service model. And certainly, our broker partners should make the most of it.”

As to whether the worst of the hard market has yet been seen, Stephen Ridley, head of cyber for Aviva, also pinpoints the tough conditions of recent years and how the sector has come out the other side. Recent market conditions have led new capacity to join the market, he says, which, in turn, has led to some increased competition and increased innovation, with people having to look at doing things slightly differently in order to differentiate their value propositions. “For us, looking at new and innovative solutions to bring to market is a really critical part of that,” he says. “One of the things that we still see within that is that companies that can evidence some of the strongest controls or those that have taken heed of everything that's gone on over the last few years are very much the best-placed to capitalise on that additional capacity that's come to market.

For McMurray the key advice is to “push for innovation.” Looking at how the product is now put together and traded and presented to clients shows that a marked change has occurred over the years, he says, and it’s important that the market continue to strive for further innovation. Also essential is the bread-and-butter of the insurance market – consistency. “Credibility is what any insurance product needs, and cyber is no different,” he says. “And volatility in pricing, coverage capacity, deployment – they aren’t always helpful when we’re looking for that credibility. We want to try to avoid that boom-and-bust cycle and reach a point where there’s more certainty

Offering his insights into what’s shaping the sector, Chris McMurray, MD of cyber at Travelers Europe, highlights how the market has stabilised after a period of restricting capacity, increasing premium deductibles, and reducing coverage in response to the onslaught of ransomware attacks seen two to three years ago. The market is very hungry for growth, he says, with rate increases moderating or even diminishing in certain cases, while specialist capacity is more available. “In addition, the way in which we distribute and trade the product has also evolved,” he says. “You’ve had the insurtechs that came into the market and approach things differently [from] the more traditional cyber markets. I think that’s forced the more traditional cyber markets to think about how they offer the products and the value placed on risk mitigation and cybersecurity assessment tools that are very much part of those platforms.”

“There's no opportunity for businesses to rest on their laurels around this. Good standards of controls are still definitely needed, and it's the way to access the widest range of that capacity.” Amid such a constantly evolving backdrop, the question of what brokers should be looking for in a great cyber insurance proposition is more pertinent than ever – particularly considering the statistic that about nine out of 10 businesses in the UK do not have a standalone cyber policy. For McMurray the emphasis needs to be on finding an insurance partner with longevity in the market, broad wordings, excellent in-house response services, and the additional services that can be offered free through a cyber policy.

McMurray notes that this has equipped customers with better insight than they’ve possibly ever had before not just into their cybersecurity picture but also into how they can improve that picture. And that’s happening in conjunction with the fact that the rate is now more palatable for insureds than it was a few years ago. Echoing McMurray’s insights, Joe Tracey, UK & EU cyber development manager at CFC, emphasises that the evolution the cyber insurance sector in the UK has undergone in the last few years has been “nothing short of quite miraculous.” This is especially clear when viewed in the context of some of the risks that the market has faced.

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He also emphasises the need for comprehensive wordings and reputable carriers, and notes that where an offering often starts to deviate is when it comes to breach response. Expertise and depth of experience are key when it comes to breach response, he says, and having a great pre-loss service combined with a top-class claims service is essential. For Ridley, it’s a question of the claims proposition above everything else.

year-on-year in terms of what the product is going to look like, what capacity’s going to be available, and, of course, for the end client, what the cost of that will actually be.” For Tracey, it’s all about going “back to basics” with cyber conversations. It’s clear that the capacity is there, he says, as is the willingness of insurers to grow – which may not have been there in previous years. And it all comes back to opening up conversations about risk. “What we don’t want to get into is a situation where businesses are being put off from procuring cyber insurance because businesses or brokers may think they require a certain level of risk management, when in fact the market is changing and they don’t actually need that.… So let’s bring it back to basics.”

In a dynamic world, your clients need insurance protection they can trust. That’s why Travelers tailors insurance and risk-management guidance to each organisation we insure. We cover a wide range of specialist business classes and can help protect a company as it evolves – so your clients can focus on driving their business forward. We have been insuring your clients’ ambitions for generations: Travelers wrote the first auto insurance, aircraft liability insurance, and personal accident cover for astronauts. We are backed by more than 160 years of experience and financial strength, and we continue to be among the world’s leading commercial property casualty insurers.

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CFC is a specialist insurance provider, pioneer in emerging risk, and market leader in cyber. Our global insurance platform uses cutting-edge technology and data science to deliver smarter, faster underwriting and protect customers from today’s most critical business risks. Headquartered in London, with offices in New York, San Francisco, Austin, Brussels and Brisbane, CFC has over 800 employees and is trusted by more than 130,000 businesses in 90 countries.

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Aviva is the UK’s leading insurance, wealth, and retirement business, providing wealth, retirement, and insurance solutions to 18.5 million customers globally and 15.5 million customers in the UK. Aviva helps individuals save and achieve financial peace of mind, either directly or through intermediaries, and provides corporate customers with de-risking solutions for their pension schemes and with solutions to help promote wellbeing and health within their workforces.

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In Partnership with

Bringing cyber insurance back to basics

As the complexity and interconnectivity of the cyber-threat environment continue to grow, cyber specialists have a key message for the market: it’s time to bring cyber insurance back to basics

Read on

Stephen Ridley

Aviva

Joe Tracey

CFC

Chris McMurray

Travelers

Industry experts

Travelers Europe

Chris McMurray

CFC

Joe Tracey

Aviva

Stephen Ridley

In Partnership with

Bringing cyber insurance back to basics

As the complexity and interconnectivity of the cyber-threat environment continues to grow, cyber specialists have a key message for the market: it’s time to bring cyber insurance back to basics

Read on

Stephen Ridley

Aviva

Joe Tracey

CFC

Chris McMurray

Travelers Europe

Industry experts

Aviva

Stephen Ridley

CFC

Joe Tracey

Travelers Europe

Chris McMurray

Published 23 Oct 2023

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“In recent years, we’ve moved on to additional services such as proactive cyber. And that’s a real big benefit for our broker partners and their clients”

Joe Tracey, CFC

“In most traditional insurance policies, the contract is a promise to pay in the event of an incident. But actually, a cyber policy is generally a promise to respond, not to pay. And so, it's really interrogating what that claim proposition looks like – and [whether] a 24/7 response is available within the product.” In the context of this rapidly evolving risk landscape, the specialists share their top tips and takeaways from current market conditions for insurance brokers, with Ridley advising brokers to take advantage of the huge amount of support and resources that is available to them. Whether from Aviva, CFC, or Travelers, he says, there is much help available, and brokers need to be primed to make the most out of that.

Risk management and supply chains

Three in ten businesses have undertaken cyber security risk assessments in the last year

Three in ten businesses deployed security monitoring tools in the last year

Few than four in ten businesses (37%) report being insured against cyber security risks

Just over one in ten businesses say they review the risks posed by their immediate suppliers (13%)

Cyber security outlook 2023

of UK senior executives say they expect attacks against cloud management interfaces to increase significantly in 2023

of UK senior executives say they expect cloud-based threat vectors to significantly affect their organisations

of UK senior executives ranked the increased exposure to cyber risk due to accelerating digital transformation as the biggest cyber security challenge their organisation has experienced since 2020

Roughly two-thirds of UK senior executives say they have not fully mitigated the cyber risks associated with digital transformation

33%

39%

90%