Demand for cyber security coverage from insurance buyers ranks number one among several emerging risks, according to a recent survey undertaken by RKH Specialty, a London-based specialty lines broker.
Insurance professionals indicated that for property coverages, supply chain disruption is seeing the fastest growth in demand. This is due to a growing recognition of the potential exposures that longer and more complex supply chains cause.
Top casualty exposures identified included cyber (70 percent), product recall and drones (11 percent each), with others including e-cigarettes, autonomous vehicles and telematics totalling only eight percent total.
For property exposures supply chain disruption was identified by 61 percent as the top risk, with flood next (30 percent) and tornadoes (9 percent) following.
“Losses stemming from cyber-related attacks and business interruption can be catastrophic for individual businesses,” said Barnaby Rugge-Price, RKH Specialty’s CEO. “Healthcare and retail have been the major buyers in the cyber space to date but we are seeing an increasing conversion rate across the whole of our portfolio. After a number of years of looking at the offering, clients are increasingly deciding to purchase the cover as the product has improved and the frequency of attacks has continued to increase. There has also been a heightened focus on the business interruption aspect, where cyber attacks can cause whole facilities to shut down. But whether cyber-related or not, any interruption to the supply chain can cause a disproportionate loss. The survey highlights the importance of specialist insurance for a whole host of emerging risks.”
The survey found a large majority of respondents (80 percent) are witnessing an increasing need for specialist risk coverages to provide better, targeted solutions for a wide range of property and casualty exposures. Of that 80 percent, about 39 percent said there is a large, increasing need and roughly 42 percent indicated a small increase in need for specialist risk coverages.
Nearly half of respondents (47 percent) indicated that they rely on domestic US brokers and carriers to meet the growing demand for specialist risks, with London a close second at 36 percent, and emerging markets third at 11 percent, Bermuda fourth (4 percent) and Continental Europe last (2 percent).
“It’s no surprise to us to see a growing demand for highly-specialised risk coverage,” said Rugge-Price. “U.S. clients tend to seek the best value from their insurance spend by tailoring coverage around their firms’ specific exposures and needs. Our aim is to respond to the increasing requirement with specialty product advice and placement services around the globe. We will continue to work with our markets to ensure we are responding to each request, providing real value in both coverage and capacity.”
Source: RKH Specialty
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