2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataWe are pleased to present key raw survey data from our 2018 Survey of CyberInsurance Market Trends, with the aim of increasing transparency and widening thepotential for extended use and analysis across the industry.The main survey report - a summary and discussion of the survey findings - is availableto download under www.partnerre.com/opinions-researchIf you would like to reproduce or disseminate this data, please note: Information(excluding the survey respondent comments in slides 33 to 38 which are included only asa point of interest and may not be reproduced or disseminated in any way) contained inthis document can only be reproduced or disseminated in the context of the evolvingcyber insurance market and should be cited as follows: ‘Source: PartnerRe and Advisen,2018 Survey of Cyber Insurance Market Trends’.1
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataDo you underwriteor place cyber insurance policiesand/or endorsements?70%60%Answer Choices50%ResponsesYes, I underwrite cyber insurancepolicies and/or endorsements(underwriter)17%7030%Yes, I place cyber insurance policiesand/or endorsements (broker/agent)65%27320%No, I do not underwrite or place cyberinsurance policies and/or endorsements19%79Answered42240%10%Skipped0%Yes, I underwrite cyber Yes, I place cyberNo, I do not underwriteinsurance policiesinsurance policiesor place cyberand/or endorsements and/or endorsementsinsurance policies(underwriter)(broker/agent)and/or endorsements20
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataI am located in90%Question to underwriters80%70%60%Answer Choices50%40%20%79%42United Kingdom / Europe15%86%3Answered53Skipped10%0%North America3North AmericaOther30%ResponsesUnited Kingdom /EuropeOther369
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataI am located in90%Question to brokers80%70%60%50%40%Answer ChoicesResponses30%20%79%191United Kingdom / Europe13%327%18Answered241Other10%0%North America4North AmericaUnited Kingdom /EuropeOther
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataAt least 10% of insureds I seeare located in (check all that apply):90%80%70%Answer ChoicesResponses60%United States85%25050%Canada12%35Latin 20%Africa1%3Other3%8Answered29310%0%5
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataIf you write cyber endorsements,what line(s)?80%70%60%50%40%30%20%10%0%6Answer O72%147GL53%108Healthcare/Medical Malpractice30%61Lawyers Professional36%73Other Professional46%95Property45%924%8Answered205Other
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataIf you have seen cyber businessswitch from endorsementsto standalone policies,what is the main reason(s)(pick maximum of top three):Answer ChoicesResponsesLooking for dedicated limit for cybercoverage70%198Looking for more limit44%123Looking for expanded BCI/ContingentBI49%13770%Looking for other areas of expandedcoverage46%12860%Looking for standalone from a differentcarrier12%359%2641%114Pressure from management/C-Suite7%21Not 0%Experienced a claimBetter access to pre- and post breachservices0%7
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataWhat industries bring the most NEWto market buyers of cyber insurance?(select top three)45%Answer 8%5235%Financial Services/Insurance38%110Government and Nonprofit18%52Healthcare42%120Information 15%Professional Services38%11010%Retail/Point of Sale24%698%22Answered28830%25%Other5%0%8
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataThe majority of our NEW to market buyersof STANDALONE cyber insurance are(including those switching fromendorsements):50%45%40%35%Answer Choices30%25%20%15%10%ResponsesSmall companies (revenues less than50M)44%127Mid-size companies (revenues 50M 1B)45%131Large companies (revenues 1B )7%20Don't know4%13Answered2915%0%Small companiesMid-sizeLarge companies(revenues lesscompanies(revenues 1B )than 50M)(revenues 50M 1B)9Don't know
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataWhat cyber coverages are NEW andRENEWAL buyers most interested inpurchasing? (select top three)70%60%50%40%Answer ChoicesCyber-related BI60%172Cyber-related dependent BI28%80Cyber-related BI &/or PD11%33Cyber extortion/ransom52%150Data breach54%156Data restoration20%59Funds transfer fraud/social engineering55%1586%18Regulatory fines/penalties26%76Reputational harm19%55System failure coverage25%733%8Answered288Internet media liability30%Responses20%10%0%10Other
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataIs aggregation actively managedby your company?70%Question to underwriters60%50%Answer Choices40%30%20%ResponsesYes, we do it all in-house63%32Yes, but we use outside vendor(s) toassist us16%8No, but we are working on it8%4No4%210%5Don't knowNo, we're not worried10%1Answered0%Yes, we do it Yes, but weall in-house use outsidevendor(s) toassist us11No, but weare workingon itNoDon't know51
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataIs aggregation management impactingyour underwriting or pricing decisions?35%Question to underwriters30%25%Answer arelyNo impactDon't knowResponsesYes, frequently28%14Yes, sometimes32%16Rarely12%6No impact18%9Don't know10%5Answered50
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataAre your renewal insureds requestinghigher cyber insurance limits?70%60%50%Answer verDon't 7%48Never2%6Don't know2%6Answered290
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataDo you rely on vendor(s) to evaluate aninsured's third-party relationships?35%Question to underwriters30%Answer ChoicesResponses25%20%15%10%5%0%Yes14No, weNo, we don't No, we don'tcapture this capture thisprovideinformation information at contingent BImanuallythis timecoverageDon't knowOtherYes31%16No, we capture this informationmanually31%16No, we don't capture this information atthis time25%13No, we don't provide contingent BIcoverage4%2Don't know6%3Other2%1Answered51
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataHow much demand is there for cyberrelated bodily injury and/or propertydamage coverage under the cyber policy?45%40%Answer Choices35%ResponsesInsureds frequently show real interest10%29Insureds sometimes show real interest34%9820%Insureds rarely show real interest42%12215%None at all7%2110%Don't w realinterest15Insuredssometimesshow realinterestInsuredsrarely showreal interestNone at allDon't know
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataDo you believe cyber-related propertydamage is better covered under a cyberpolicy or a property policy?Question to underwriters70%60%50%40%Answer Choices30%ResponsesCyber24%12Property61%31Don't n't knowOther
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataDoes your company's cyber insurancepolicy or endorsement provide coveragefor cyber-related bodily injury and/orproperty damage losses?Question to underwriters60%50%40%30%Answer Choices20%0%Yes17Yes44%22No50%256%3Answered50Don't know10%NoDon't knowResponses
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataIf your company's cyber insurance policyor endorsement does not currentlyprovide coverage for cyber-related bodilyinjury and/or property damage,does it plan to in the future?Question to underwriters40%35%30%25%Answer Choices20%Yes11%515%No21%10Don't Don't knowN/A
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataDoes your company provide fundstransfer fraud loss coverage with thecyber insurance policy?Question to underwriters40%35%30%25%Answer Choices20%Yes, frequently34%17Yes, on es15%10%Don't know5%0%Yes,frequently19Yes, onoccasionRarelyNoDon't know
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataDo you believe funds transfer fraudloss due to social engineeringis better covered by a cyber policyor a crime policy?Question to underwriters80%70%60%50%Answer ChoicesResponses40%Crime71%3630%Cyber18%920%Don't know2%110%5Answered51Other10%0%Crime20CyberDon't knowOther
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataWhat do you see as the top driver(s)of cyber product sales?(select up to three)ResponsesExperiencing a cyber-related loss50%144News of cyber-related lossesexperienced by others56%161Good sales people11%31Cost13%38Regulatory changes33%95Breadth of coverage13%38Increased education40%11630%Board or senior management demand39%11242%12120%Required by a third-party (e.g.customer)Risk mitigation services12%351%2Answered28760%50%40%10%0%21Answer ChoicesOther
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataWhat are the biggest obstaclesto writing cyber insurance policies?(select up to three)80%Answer ChoicesResponses70%Cost42%12160%Scope of coverage12%3450%Not understanding exposures75%215Not understanding acity constraints in market30%20%10%0%22Application processLack of value added products/servicesDifferent policy forms/coverages inmarket
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataCoverage overlap between cyber andother policies has:40%35%30%Answer ChoicesResponses25%20%13%37Increased slightly38%1098%23Decreased slightly15%42Stayed the same15%44Don't know10%28Answered288Decreased significantly15%10%5%0%Increased Increased Decreased Decreased Stayed the Don't knowsignificantly slightly significantly slightlysame23Increased significantly
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataPlease answer trueor false to the alse0%Overall, the Market is more Market is more There haveCoverageCoveragecyber insurance competitive on competitive on been many new expansion isexpansion ismarket is more large/national small/mid-size entrants to the necessary tonecessary tocompetitive thanaccountsaccountsmarket this past attract new stay competitivelast year.yearinsureds24FalseTotalOverall, the cyberinsurance market is morecompetitive than lastyear.90%25610%29285Market is morecompetitive onlarge/national accounts78%21622%62278Market is morecompetitive on small/midsize accounts78%22122%61282There have been manynew entrants to themarket this past year71%20129%82283Coverage expansion isnecessary to attract newinsureds66%18634%94280Coverage expansion isnecessary to staycompetitive90%25410%27281
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataWhat do you think of GDPR?True or False.True90%80%FalseTotalGDPR will significantlyimpact current policywordings60%16340%107270GDPR will significantlyimpact current pricing levels43%11557%153268GDPR won't have much ofan impact on buyers untilthere are headline losses71%19129%77268GDPR will only impactpolicy wordings and pricingin Europe24%6376%205268GDPR will lead to higherfirst party claims losses thanwhat we see in the US51%13349%129262GDPR will lead to higherthird party claims lossesthan what we see in the DPR willGDPR willGDPR won't GDPR will only GDPR will lead GDPR will leadsignificantlysignificantly have much of an impact policyto higher first to higher thirdimpact current impact currentimpact onwordings andparty claimsparty claimspolicy wordings pricing levelsbuyers untilpricing inlosses thanlosses thanthere areEuropewhat we see in what we see inheadline lossesthe USthe US25
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataDo you believe cyber-related propertydamage is better covered under a cyberpolicy or a property policy?Question to brokers60%50%40%Answer 't know13%315%11Answered237Other0%PropertyDon't knowOtherResponses
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataDo you believe funds transfer fraud lossdue to social engineering fraud is bettercovered by a cyber policy or a crimepolicy?Question to brokers60%50%40%Answer ChoicesResponses30%20%10%0%Crime27CyberDon't knowOtherCrime54%128Cyber36%86Don't know6%14Other5%11Answered239
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataIs cyber insurance pricing becoming moreconsistent among carriers?60%Question to brokers50%40%30%Answer Choices20%10%0%Yes, frequently28Yes, sometimesNo, the market is verydisjointedResponsesYes, frequently21%49Yes, sometimes49%117No, the market is very disjointed30%71Answered237
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataIs cyber insurance coverage becomingmore consistent among carriers?60%Question to brokers50%40%30%Answer on't know0%NoDon't knowResponses
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataDo you limit the number of carriers thatyou place primary coverage with due tothe wide variety of policies and language?Question to brokers80%70%60%50%40%Answer ot applicable10%0%Yes30YesNoNot applicable
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataHave you noticed a difference in claimshandling among carriers?45%Question to brokers40%35%30%25%20%Answer ChoicesResponses15%Yes40%9610%No25%60Don't know35%83Answered2395%0%Yes31NoDon't know
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataDo you think cyber insurance policies aremeeting the needs of insureds?90%Question to brokers80%70%60%Answer Choices50%ResponsesYes, always17%48Yes, sometimes77%21940%30%Rarely3%920%Never0%0Don't know3%8Answered28410%0%Yes, always32Yes,sometimesRarelyNeverDon't know
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataSlides 33 to 38 contain a selection of additional comments made by survey respondents. Please note,this content is included only as a point of interest and may not be reproduced or disseminated in anyway.Please add any comments or thoughts (positive or negative)you would like to share regarding the cyber insurance market:Since all businesses have paper files, cell phones, laps tops, computer terminals, web portals, it is almost impossible to avoid an exposure todata breach or cyber liability claims; cyber liability is an exposure that can't be retained or self-insured by small to medium sized companiesCyber claims settlements are inconsistent among carriers. Courts are [inconsistent] with their settlements producing excessive costs forinsurers and claimants alike. Contracts are all different and clients know this which contributes to their reluctance to buy cyber coverageAt times, insurance as a whole is looked at as a 'necessary evil' to conduct business. We need to provide clients products that are lessrestrictive (minimize exclusionary language) and will be able to respond to claims appropriately.The application form and application process is still too difficult and takes too long for the client, especially the IT part, which is notunderstandable for the company manager.Also there is the [lack] of cyber insurance coverage and understanding of [its] necessity for the client.It always depends on the exposures, needs, and expectations of the insureds. Cyber exposures are continually expanding.The market has evolved considerably in the past 10 years but all of the cyber coverages that were available( if you knew where to look) in2011 are now being offered by a significant number of the leading markets - biggest changes include dropping prior acts and retro datescoverage exemptions, the development of BI and Contingent BI coverages, and cyber theft of funds - interestingly we haven’t seenunanticipated causes of loss, nor an aggregated loss event, so the future remains.uncertain ?Speed of response is going to be a big differentiator in the future. Clients have expressed concern with Cyber Extortion wordings that requirethe insured to obtain approval from underwriters before paying as often demands come in after normal business hours with short timeframes.Having the individual taking the claim report able to advise and authorize (at least to a certain amount) is going to be seen as a trueadvantage for these insureds.There is an industry-wide need for carriers for revisit how they approach certain coverage extensions. No reason why a scenario may becovered under Cyber, Crime or Property policies. Like other loss, there should be 1 policy to address these issues. Once that is done then wecan look for more consistency in policy language and definitions [as] terms vary significantly from carrier to carrier and pose challenges whenreviewing and forming comparisons to clients.33
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataPlease add any comments or thoughts (positive or negative)you would like to share regarding the cyber insurance market:I need more education. I watch as many videos and carriers as possible.Capacity and accumulation risk with larger BI incidents at focus.Requires clarity how the policy will respond in case of a claim. Cover different scenarios to help the insured understand the difference and importance ofhaving a Cyber policy.Cyber coverage for manufacturing systems is badly needed. Not the software which comes with a new piece of [manufacturing] equipment. Coverage forthe many hours of customization done to each of these machines and their interface with engineering/design pc's.Time will tell what the "right" price is for the breadth of coverage currently provided. It seems highly likely the premium for excess cyber coverage is notthe "right" price.Should be more linked to reinsurance concerns about systemic and CBI risksPre loss control is invaluable. Brokers have to push it onto clients. Until clients get hit, one can bring a horse to water, but one cannot make it drink.More standardization requiredThe market is in a constant state of evolution, more reactive to technology change than anticipatory. Underwriters seem to lack overall expertise andability to separate fact from fiction some days. More losses will help clarify that.Needs to be more coordination of other insurance clauseStructural constraints remain a fundamental challenge to the industry. New exposures continue to emerge, the risk selection process is maturing andrefinement is still needed in capturing the appropriate underwriting data. As an industry, we are working toward better risk differentiation – both inregard to structure offered as well as pricing discernment.If you are going to layer limits you do not need to layer all coverage offerings in the primary.The contract is specific to certain coverage generally Network Security, Regulatory or Privacy the rest do not need to be quoted for excess.Reading and negotiating excess limits with client very important.Reading and negotiating coverage with vendors even more important.34
2018 Survey of Cyber Insurance Market TrendsSupporting Raw DataPlease add any comments or thoughts (positive or negative)you would like to share regarding the cyber insurance market:In Brazil the market [is] very young, most carriers have no authority so the UW process is very slow.We are struggling with a lack of know-how on the side of UW and with a certain ignorance of the market. There's a lot of interest due to GDPR and Brazilianforthcoming LGPD.Overall it is a new necessity for the market place, unfortunately, many businesses do
2018 Survey of Cyber Insurance Market Trends Supporting Raw Data 1 We are pleased to present key raw survey data from our 2018 Survey of Cyber Insurance Market Trends, with the aim of increasing transparency and widening the potential for extended use and analysis across the industry.
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