UK-based specialist insurer Beazley has created Cyber & Executive Risk, a new division to focus on challenging risks confronting businesses globally.
Beazley has appointed Mike Donovan to lead the new division, which will combine the capabilities in cyber insurance and expertise in executive risk, including directors’ & officers’ (D&O) insurance and employment practices liability (EPL).
The company claims that its executive risk team presently insures more than 35% of the Fortune 500 and more than half of the companies comprising the Dow Jones Technology Index.
Donovan said: “We brought our expertise in these areas together for two main reasons. First, they are rapidly changing risks that are growing harder for companies to manage. Technological, social and regulatory changes all impinge on these risks and it is critical for our clients to partner with an insurer that can keep pace with these changes. We provide, not simply insurance coverage to respond swiftly to claims, but detailed guidance on risk prevention, mitigation and incident response.
“Second, the stakes are very high. We’re protecting critical assets – our clients’ data, their operations, their senior executives, and their corporate reputations. A cyber attack can put all of these assets at risk, but a class action lawsuit against a company’s directors can be comparably damaging. And the acceleration and amplification of bad news through social media means that reputational damage can be inflicted faster and with greater effect.”
Beazley said the business lines that have been combined to form the cyber & executive risk, have accounted in total for a little over one-fourth of the company’s gross written premiums last year and also include some of the fastest growing products.
These include the company’s flagship cyber product, Beazley Breach Response (BBR) and – within its executive risk product suite – M&A transaction liability insurance.
Underwriters of the cyber and the executive risk are also touted to have pioneered in a variety of new products over the years. These products usually combine coverage to indemnify clients against the financial costs of lawsuits with expert services to minimize the chances of claims occurring and respond effectively to incidents when they do occur.
BBR Services, the company’s in-house cyber incident response unit is an example of the broader approach to risk management which has been pioneered by Beazley.
Last month, the company partnered with Pegasus Underwriting Limited (PUL), a Hong Kong-based coverholder, as part of its plan to expand in Asian markets.
Integrating PUL’s market knowledge and its broking relationships with its global expertise in underwriting specialist risks is claimed to have created an efficient distribution channel for both brokers and commercial customers.