Insurance provider Travelers Europe has announced a new standalone cyberinsurance product, Travelers CyberRisk, for organisations in Ireland and the UK.
The new product will provide liability and first-party cover for losses from cyber attacks to organisations of all sizes. It will also include access to certain breach mitigation services, including breach coaches, forensic investigators, public relations support and credit monitoring services for customers impacted in the event of a breach.
Going forward, it will be available both as a standalone product and as part of the Travelers Management Liability Package.
“With cyber threats continuing to evolve, businesses without dedicated cover could find themselves insufficiently protected in the event of a breach,” said Davis Kessler, Head of Cyber at Travelers Europe. “Our global team has created a package designed to help companies navigate their cyber event response so they can return to normal as quickly as possible.”
The product includes limits up to £10 million across liability, breach response, cyber crime and business loss covers – an amount broadly consistent with other insurers’ forays into cyber coverage. It’s a significant increase from Travelers’ previous offerings, which typically covered cyber-related losses of up to $1 million, with just under a quarter of their policies covering up to $5 million.
The company has been expanding its cyber-related offerings over recent years – back in November, president of bond and specialty insurance Thomas Kunkel shared that the company has increased its cyber business at a 40 percent compound annual growth rate since 2011.
At the time, he said that Travelers was “in the right spot” to expand further, but stressed the importance of remaining “respectful and prudent” about the risks involved in cyber. As we’ve discussed, the market is “promising but problematic”, and despite growing demand, many traditional insurers remain hesitant to enter the space.
The primary challenge is the difficulty of modelling risk – as an emerging area of risk, and one where companies have historically been reluctant to disclose breaches or exact losses, insurers are dealing with a much smaller database than for other types of risk, such as natural disasters or ‘traditional’ theft. At the same time, the field is changing rapidly, particularly due to advances in technology and regulatory change such as the GDPR, so what data they do have is quickly becoming outdated.
“I don’t think we or anybody else really knows what they’re doing when writing cyber. It’s just really, really early in the game,” commented Berkshire Hathaway CEO Warren Buffett, earlier this year.
But Travelers, at least, seems more confident. Claiming more than 30 years of cyber-related insurance coverage – though the past decade is likely to have provided the most relevant information – the company clearly believes that it has the knowledge and experience to step up to the plate.