It’s no secret that cyber risks have become one of the top concerns of organizations of all types and sizes. Data breaches, denial of service attacks, and other sorts of illicit intrusions and their aftermath can have both a serious financial and a reputational impact.
Cyber criminals are becoming bolder and expanding their universe of targets. Meanwhile, attacks are often widely publicized, with consumers, regulators, and legislators taking an increasingly stern view of organizations’ information security lapses.
Understandably, organizations exposed to cyberattacks are interested in insurance coverage to address the risk. The traditional insurance market has worked to craft coverage options to address some cyber exposures, and more and more insurance buyers are purchasing cyber insurance policies. But, for many organizations, what’s available in the market doesn’t match neatly with the exposures that worry them most or provide the limits they seek.
Over the years, that sort of predicament—exposures without adequate or appropriate solutions in the traditional insurance market—has prompted organizations to turn to captives for a solution. It comes as no surprise that many are now looking to their captives to address cyber exposures.
Leff Communications’ latest Rethinking Risk podcast takes a look at that trend through a conversation with Peter Mullen, chief executive officer of Aon Captive and Insurance Management. Earlier this year, Aon Global Risk Consulting introduced its Cyber Captive Program, a program aimed at helping companies use their captives to better address their cyber risk exposures. In the podcast, Mullen discusses some of the reasons Aon created the program, provides details on how it works, and offers insights into how captive owners might use it to address their cyber exposures.
One of the most interesting features of the program is that it puts a decided emphasis on helping organizations understand the risks they face: the program’s first step is helping organizations identify, assess, and quantify their cyber exposures. From there, captive owners can potentially use the alternative risk transfer vehicles to assemble needed limits, transfer cyber exposures to the reinsurance markets, and shape coverage that fits an organization’s needs as its cyber exposures evolve.
In addition to being available here on the Leff Communications website, this episode and others in the Rethinking Risk podcast series are available free in the iTunes store, where you can subscribe and be notified when new episodes are posted. Have a listen.