- New agreement offers insight to complex cyber risks for companies as the global cyber insurance market is expected to grow exponentially
- Partnership extends to digital distribution platforms and risk modelling research
- AGCS expanding predictive underwriting capabilities via technology and partnerships to address new generation of business risks
Global Corporate & Specialty SE (AGCS), Allianz Group’s specialist carrier for corporate insurance business, has teamed up with Silicon Valley-based cyber risk analytics and modeling firm Cyence to boost its global cyber risk analysis capabilities. By combining Cyence’s cyber analytics platform with AGCS’ underwriting processes, the insurer will be able to analyze cyber exposures at company level for large businesses, creating a detailed understanding of their cyber risks and quickly allowing it to tailor coverage to fit specific customer profiles.
In a second initiative, AGCS plans to integrate Cyence’s cyber risk analytics into new digital distribution platforms that enable low-touch, automated underwriting of cyber policies for medium-size companies. Both companies are also joining forces to develop a new predictive modelling tool for cyber-driven business interruption risks.
Growing vulnerabilities, growing demand
Recent cyber attacks have illustrated how vulnerable even well-prepared businesses can be to such threats: Cyence estimates that May’s Wannacry ransomware caused economic losses reaching $8 billion, inclusive of extortion payments, business interruption lost profits, and extra expenses required to keep businesses moving and restore systems.
In parallel, cyber risk increasingly features on boardroom agendas, with some larger companies now looking to purchase cyber insurance coverage for up to €500 million in losses. The global cyber insurance market is expanding quickly and is predicted to rise from US$ 2.5 billion in 2015 to US$ 7.5 billion by 2020, reaching US$ 20 billion in premiums by 2025, according to KPMG. This increasing demand creates challenges for insurers in assessing risk, both at individual company level and in the case of a widespread attack where claims may accumulate, producing industry-wide losses at potentially unprecedented levels. With limited historic claims information, plus a fast-changing cyber threat, traditional insurance underwriting approaches are struggling to fully assess these new risks.
AGCS will use the Cyence predictive risk modeling platform to address these challenges: it will be able to quickly produce individual cyber risk profiles to improve its underwriting of each customer, as well as modelling its cyber accounts worldwide in economic terms to identify trends or growing risks or understand how they would respond to cyber incident scenarios.
Arvind Parthasarathi, CEO of Cyence, added: “We are excited to be partnering with Allianz to understand and model cyber risk and grow this important coverage line. The progression of global cyber regulation and evolution of the risks businesses face make it more important than ever for companies of all sizes, industries, and geographies to review their cyber security and resilience safeguards, and consider cyber insurance as part of a robust risk management strategy.”
Automated cyber underwriting
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About Allianz Global Corporate & Specialty
Allianz Global Corporate & Specialty (AGCS) is a leading global corporate insurance carrier and a key business unit of Allianz Group. AGCS provides risk consultancy, Property-Casualty insurance solutions and alternative risk transfer for a wide spectrum of commercial, corporate and specialty risks across 12 dedicated lines of business.
Our customers are as diverse as business can be, ranging from Fortune Global 500 companies to small businesses, and private individuals. Among them are the world’s largest consumer brands, tech companies and the global aviation and shipping industry, but also wineries, satellite operators or Hollywood film actors. They all look to AGCS for smart answers to their largest and most complex risks in a dynamic, multinational business environment and trust us to deliver an outstanding claims experience.
We constantly strive to deliver the best for our customers through our global team of around 4,400 employees from over 70 nationalities in 34 countries worldwide. As the one of the largest Property-Casualty units of Allianz Group, we are backed by strong and stable financial strength ratings and a global network in over 200 countries and territories. In 2018, AGCS generated a total of €8.2 billion gross premium worldwide.