Cyber protection and global insurance programmes
AXA XL’s Ms Shiwei Jin says multinational companies can use global insurance programmes to protect their assets in different geographies from risks like cyber that respect no boundaries and are almost always one step ahead of all security strategies.
By Anoop Khanna
Cyber attackers have exploited the pandemic to the hilt. Even as the pandemic ebbs, cyber criminal activities show no sign of abating and it doesn’t even look likely. While the hackers don’t distinguish big or small, their targets are usually large corporate entities operating in different geographies.
Pandemic has changed cyber risk dynamics
Speaking with Asia Insurance Review AXA XL global programmes and captives regional director for APAC Shiwei Jin said, “According to our latest AXA Future Risks Report 2021, the massive use of digital solutions during lockdowns resulted in an explosion in the number of cyber attacks, with serious consequences for companies and administrations. For the first time, cyber risk has taken the top spot in the US and the second place in all other geographies including Asia.”
Ms Jin said, “Threat landscape and priorities have changed due to the massive shift to remote work and digitalisation. Today’s cyber criminals are highly sophisticated, agile and well-financed, it is critical for organisations to assess, prevent and transfer their cyber risks effectively.”
A report by Accenture in early 2020 said the rush to remote working meant more employees using their own devices - printers, monitors and USB devices - to supplement those provided by employers.
More unprotected desktop protocol connections lacking multi-factor authentication meant more stress on people working remotely as they cope with new systems and protocols.
Global insurance programmes can bridge the gaps
As more and more manufacturers rely on internet of things devices to monitor/control their operations, the incidence of cyber attacks in the manufacturing sector is growing rapidly.
Cyber criminals are becoming more experienced in exploiting vulnerabilities in automated systems and IoT devices, which are often installed with little or no built-in security.
Ms Jin said, “Today multinational companies usually prefer to insure their multi-country risks through a global insurance programme. It provides an advantage of having broad, consistent coverage with no gaps or overlaps. This becomes all the more important in the current scenario where borderless threats like cyber attacks are surging rapidly.
“There are several reasons that underscore why it makes sense to manage and mitigate cyber risk in a global programme. Global insurance programmes have helped companies protect their employees and either sustain or grow their businesses during the pandemic.”
“First and foremost, cyber attacks are borderless. When a company seeks to have separate policies for its geographies, the capacity in the market could be reduced potentially given that cyber can affect all of its geographies at the same time and insurers would need to look into their risk aggregation. To have a global programme where limits and conditions are shared under the master, clients would have the opportunity for better pricing and wording,” said Ms Jin.
Expertise and resources available
A global insurance programme also makes available an insurer’s best expertise and resources for the overall benefit of the global insurance programme client.
Ms Jin said, “Unlike general property and casualty coverages, standard cyber policy wordings are not widely available in many places. In sum, a global insurance programme for cyber offers clients greater transparency, certainty and consistency. With this relatively new, complex and continuously evolving threat, local capabilities for assessing, underwriting and preventing it vary considerably.”
“Clients insuring cyber in a global programme will typically work with highly skilled underwriters who understand cyber risk in different parts of the world. We offer our clients access to expert vendor partners who provide proactive cyber risk mitigation services at negotiated preferred rate.”
Ms Jin said, “Also, in the event of a cyber incident, the insurer’s designated response team can provide specialised resources instantly in country or from all over the world in a compliant manner.”