The downside of blended insurance policies that include cyber with other coverage is well known. Blended policies can complicate underwriting and diversification and even create confusion and conflict between different types of insurance. Here’s a recent report of ours about potential conflicts between D&O and cyber insurance in light of new SEC cyber regs.
Standalone policies provide more clarity for insured and carriers alike and help the latter focus on better underwriting, risk selection and other elements in a sector with rapidly evolving risk profiles and the potential for systemic losses.
These are factors clearly on the mind of Axis Re as the reinsurer, now focused on specialty lines, grows its cyber business. “We’ve seen the [broader market] trend over the past year where cyber is being pulled out of blended treaties and written on a standalone basis…This is where [Axis Re] has been leaning in and expanding to meet clients’ needs,” said Axis Re CEO Ann Haugh in an interview with The Insurer (read it here.)
It’s unclear how far carriers have gotten in moving to standalone. This report includes estimates that app. 25% of enterprises have standalone policies (from Forrester) to 70% of cyber premiums being written for standalone policies (from AM Best) [The gap probably reflects to some degree the distinction between enterprises with cyber insurance and premiums written. Perhaps larger companies that pay high premiums are more likely to have stand-alone policies.]