Category Archives: Market Research

An Empirical Analysis of Data Breach Litigation – an analysis of 230 federal data breach lawsuits

Good data are hard to find – especially about data breach litigation.  But thanks to the NetDiligence blog, I came across this interesting study of 230 federal data breach lawsuits heard during the 2000-2010 time period.  Although originally published in February, I haven’t seen the study mentioned as much as I might have expected.

The study (available here) asks:

  • What data breaches are being litigated in federal court? and
  • Which data breach lawsuits are settling?

Well worth reading.

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I’d Like to Know Why More Commercial Insureds Don’t Buy Patent Infringement Coverage – a poll

This puzzles me (and since I am finishing our IP and Media Liability Insurance Market Survey 2012, it’s on my mind).

Here’s the link to the poll; let’s see if we can all learn something:

http://linkd.in/GXU166

Cyber Risk Insurance for the Middle-market – How Senior Execs Become Aware of This Product

In our Middle-market Cyber Risk study, we asked senior executives how they learned that insurance for cyber and privacy risks was an option.

Senior executives told us that audit firms and news reports were a significant source of awareness of the availability of cyber insurance, in addition to their brokers.  Board members were not a significant source of awareness, somewhat to our surprise.

Clients and customers were not a significant source of awareness, but we think this will change a lot.  Contracting requirements for proof of insurance for data loss will be the big driver in this market in 2011 and 2012.

Click on the link below to see our discussion from the report Understanding the Cyber Risk Insurance and Remediation Services Marketplace: A Report on the Experiences and Opinions of Middle Market CFOs ( which is now available for $295).

How Middle-market Companies Heard about Cyber Risk Insurance

Thoughts about Specialty Insurance for 2011 – Cyber/Privacy products

Specialty insurance is always interesting – at least for those of us that are fascinated with the high degree of innovation in this fast changing insurance segment.

Here’s what 2011 looks like from here, for Cyber/Privacy products:

  • Privacy is the key word for prospective insureds, and thus, their agents and brokers; look for more products to cover only the privacy risk.  We’ll be hearing a lot more about privacy insurance, and less about cyber risk insurance (though both are needed, and indeed are hard to separate).
  • Post-breach (aka remediation) claims will increase, both in frequency and severity.  Carriers will have a tough time making an underwriting profit as a result.
  • Increasing numbers of carriers will be offering cyber/privacy products, making it tough to achieve rate adequacy (see above).
  • As a result, carriers will put more emphasis on claims cost control, negotiating with remediation service providers for lower rates and more efficient delivery. NOTE: insureds can expect fewer choices amongst insurer-approved providers.
  • The middle market will be buying a lot more of this product (our recent study of the middle-market prospects for cyber/privacy insurance indicated that 25% of the respondents planned to buy within the next 18 months).
  • Distinguishing between products will continue to be a challenge for agents and brokers; wholesalers will be key to getting the right product into the insurance portfolio of middle-market insureds.
  • Brokers will add to their cyber/privacy bench depth as client demand outstrips resources.
  • As this product line grows, finding enough technical skill to underwrite and manage claims will constrain growth.  Where will this talent come from?

 

The Middle-market’s Opinion of the Value of an Underwriter’s Knowledge in Cyber/Privacy Insurance

In our recent study of the market for cyber/privacy insurance and services, we asked insureds and prospective insureds about their opinion of the value of a knowledgeable underwriter.  This is an important question in a complex, evolving product like Cyber.

We were surprised, though we probably shouldn’t have been, that the respondents were not all that concerned with the expertise of the underwriter.

Why is this important?  Not only can a knowledgeable underwriter help an insured or a prospective insured understand the risks that are being evaluated, they are also more likely to be a more stable market.  I believe that an expert underwriter who understands the risks is less likely to be surprised when claims arise, as they inevitably do.  A surprised underwriter might react by restricting coverage, dramatically raising rates, or even withdrawing from the market

Naive capacity is not good for insureds, brokers, or insurers.  We’d like to see these middle-market companies place more value on the knowledge of their underwriter, as well as on the knowledge of their broker, when considering cyber insurance.

Here’s the question and the results, as well as more of my comments:Value of Underwriter’s Knowledge

What do you think?

§ Market Penetration and Product Awareness – 9 charts

% of respondents that carry Cyber Risk insurance

Reasons why they don’t buy this insurance

Do they intend to buy it in the next 18 months?

How they learned of Cyber Risk insurance

§ Opinions on Product Features – 27 charts

Opinions about specific product features for both coverage and services

Satisfaction with premium cost

Willingness to pay more premium for key product features

Satisfaction with limits and deductible options

The value of underwriter and broker knowledge

§ Opinions about Cyber Risk Insurers, Brokers, and Service Providers – 7 charts

Which insurers and brokers are insureds and prospective insureds familiar with?

Satisfaction with current insurer?  Broker?

Which service providers are insureds and prospective insureds familiar with?

Number of respondents that have had a claim?  How satisfied are they with claims handling?

The 2 Most Valued Coverages in a Cyber/Privacy policy for middle-market insureds

The following is excerpted from our recently published study Understanding the Cyber Risk Insurance and Remediation Services Marketplace: A Report on the Experiences and Opinions of Middle Market CFOs.

The question asked was (click on the link for the chart and commentary): The 2 Most Important Coverages all respondents.

To view the Executive Summary, please click here.  To purchase the full Report, click here.

Cyber Risk Insurance – Why Middle-market companies don’t buy it (an excerpt from our study of middle-market insureds)

The following is excerpted from our recently published study Understanding the Cyber Risk Insurance and Remediation Services Marketplace: A Report on the Experiences and Opinions of Middle Market CFOs.

The question asked was (click on the link for the chart and commentary): Why Middle Market Companies Don’t Buy Cyber Risk Insurance.

To view the Executive Summary, please click here.  To purchase the full Report, click here.