Tag Archives: The Betterley Report

Politico Briefing on Politics and Cyber Security

Worth a read (and not just because they quote our estimate of premium volume).  Great commentary by Dave Perera on Cyber in the political realm, including the administration’s encouragement of Cyber insurance.

The summary is here: Politico

Unfortunately the balance of the article is behind their paywall, but the summary is useful.


New Cyber Risk and Privacy Insurance Product to Expand the Small and Medium Sized Market

We were recently introduced to Digital Risk Resources (DRe), a new company that is bringing cyber risk and privacy coverages to small- to mid-sized commercial insureds.  DRe is not an insurance company or a broker, but rather a company that provides a turnkey product for insurance companies that want to offer cyber risk insurance protection without the expense and risk (and long lead times) of creating their own product.

This private label product includes:

  • Draft endorsement language (dubbed Internet Security and Privacy – ISAP),
  • Web-based underwriting and rating,
  • Risk management services, and
  • Claims support

Best of all, they have 100% quota share support for ceding carriers.  Aspen Re, the A-rated Bermuda company founded in 2002, provides the reinsurance support and is a part owner of Digital Risk Resources.

Turnkey options like this, for carriers that don’t want to invest the time or money in creating their own product, staffing up, and securing reinsurance, are not new.  GenRe, for example, has had a similar product for Employment Practices Liability Insurance for years.

In our experience, carriers often face requests (and sometimes demands) from their agents to offer these new and complex products.  These requests to fill out the portfolio of coverages that the agent can offer from a single carrier have to be responded to; for cyber risk, DRe’s approach can make a lot of sense to a carrier facing these requests. http://www.digitalriskresources.com/welcome-digital-risk-resources

Hudson Side A D&O product – The Defender

Hudson‘s Side A DIC product, branded The Defender, is a U.S.-issued product that offers up to $15 million in limits.  The carrier considers all public companies to be its market, but is seeing more and more interest from private companies and not-for-profits.  Not for hedge funds, though.

In talking with Matt Deneen of Hudson, we noted that he is seeing an increasing interest in coverage on the part of private companies and not-for-profits.  We have been saying that directors of even private companies, as well as large not-for-profits, ought to consider the additional protection of a Side A policy.  Perhaps now they are.

Beazley updates its Cyber Risk product offerings with unusual per individual limit for notification costs

Beazley‘s  new Breach Response Cyber Risk product has some new wrinkles worth paying attention to.

The notification costs section of the prior policy has been replaced by the Breach Response section of the policy.  The breach response section of the policy will provide notification (including credit monitoring) for up to 2 million individuals plus up to $250,000 for forensic and legal expenses related to notification.  The Breach Response Services are provided in addition to the policy limits applicable to the defense and indemnity of any claim made against the insured.

The Security & Privacy Liability, Regulatory Defense, and Website media coverages are included and are the same as the Information Security & Privacy policy.

Target markets include:

Healthcare organizations (including hospitals, doctors’ groups and health insurers),

Higher educational institutions with revenues of more than $50 million,

Retail and hospitality companies with revenues of between $50 million and $3 billion.

$10 million capacity is reported.

Beazley Breach Response also features low retentions for this line of coverage  – between $10,000 and $20,000 for attorneys’ fees, computer expert expenses and notification costs, and a retention of between 100 and 250 notified individuals for credit monitoring services.

The policy agrees to pay the costs of the notification for up to 2 million individuals.  I interpret this change to a 2 million individuals limit (policies generally have $ limits, not per person limits) to be a response to the very substantial losses that some Cyber Risk carriers have paid for notification costs.  It also has the added benefit to the insured that per individual costs don’t have to be estimated when selecting limits.

Interesting – I wonder if other carriers will follow suit?

Welcome to The Betterley Report Blog on Specialty Insurance

Welcome to The Betterley Report Blog on Specialty Insurance Products.  In this blog, I hope to shed some light on the different specialty insurance products available to commercial insureds, and how individual products differ from one another.  With luck, we’ll be providing information that helps readers choose the right types of products for themselves and their clients.

If you are familiar with The Betterley Report, you know that I write about specialty insurance products designed for commercial insureds of all sizes.  I have been authoring these Reports since the mid-’90s (!), and am fortunate to have many of the leading insurance companies, agents and brokers, reinsurers, attorneys, and service providers, as well as Risk Managers and CFOs, as subscribers.

As I talk with my readers, they often ask me about new developments in the products I cover.  With each Report limited to an annual freshening, we have not had a way to provide interim updates.  I figure that this blog might solve that problem nicely, since I can report on new products and changes in existing products as they are hitting the market.  Since I don’t want to just be an outlet for press releases, I’ll be sure to offer some observations about those products as well.

These Reports are available only to subscribers, and each Report is updated annually.  Some of the products I research are Cyber Risk, Directors & Officers Liability, Technology Errors & Omissions, Employment Practices Liability, and Intellectual Property insurance.  There are 6 Reports each year.

I write The Betterley Report for insurance professionals that want to find out who has the most appropriate insurance product for their clients, and for insurance companies  looking for competitor intelligence.  To be candid, I also write because I believe that comparative information helps drive improvement in the product .  As an independent risk management consultant (which means I advise clients on the types of insurance they need and which insurers they should buy them from, as well as alternatives such as self insurance), improving the breed is a passion for me.

So, welcome – this is a work in progress, and I hope you will join me in moving the specialty insurance products business forward.

Note: just got my first comment on our October issue (covering Side A D&O products), so I’d better get blogging.

More D & O Side A Markets

No sooner did I get my new blog up than I received a note from Old Republic Insurance Company that they too have a Side A D&O liability insurance product.  We’ll be sure to invite them to participate in our next Report on that product (October 2010).

Our latest Report on Side A D&O products (October 2009) was very favorably reviewed by RBC Capital Markets’ Insurance Observations (Mark Dwelle’s very worthwhile weekly newsletter on insurance companies from an investor’s perspective); one of their readers must have passed it along to Chicago Underwriting Group.

So I am pleased to note that Old Republic has Side A D&O products, with up to $25 million capacity.  They are offering lead Side A/DIC, Excess DIC, and Independent Director products.

Markets they are not interested in generally include:

Special Purpose Acquisition Companies
Hedge Funds
Private Equity Investment Groups

BTW, Chicago Underwriters Group, Old Republic’s underwriting manager for this product, has an interesting D&O newsletter at http://www.cug.com/documents/newsletter/CUGCOMments-64.pdf.