The proliferation of ransomware incidents over recent years has been a stark feature of the growing cyber threat to business, with attacks becoming more frequent and severe. Aon’s Cyber Insights for Insurers March 2020 reports that total ransomware incidents recorded in 2019 increased 135% over 2018 levels, with criminals making millions of dollars in ransom payments.
The threat actors behind the Netwalker ransomware are believed to have made US$25 million in just the second quarter of 2020 alone. And some nation states are taking a lead with North Korea having reportedly developed its own ransomware capability – VHD – which is believed to have successfully targeted multiple companies[1].
For businesses who fall victim, the cost of ransomware doesn’t stop at the ransom payment (which itself can run into the tens of millions); there’s the remediation and clean up needed after the attack as well as other potential costs such as non-damage business interruption.
A new cyber excess facility could be the answer for businesses concerned by the ransomware threat and looking for more insurance protection says Alistair Clarke, Executive Director – Cyber & Commercial E&O, Aon’s Cyber Solutions EMEA
Insurers react
A tangible consequence of this activity is – for the first time – a hardening cyber insurance market as insurers react to deteriorating loss ratios and increasing reinsurance costs. For buyers, this translates into higher premiums and a reduction in available limits at a time when their cyber exposures are increasing. Buyers want and need bigger limits to protect their businesses but they’re harder to come by in today’s market.
Helping clients navigate an increasingly complex world is the theme of a recent Aon whitepaper and helping clients overcome this lack of capacity in the cyber market – an unmet need – is exactly the type of challenge that Aon strives to solve “by accelerating innovation that improves access to new sources of capital and introduces new structures that improve client choice.”
A new excess facility
An example of this innovation is the new Aon Excess Cyber Facility (AXC), providing up to 50 million of capacity in any currency to help businesses – operating in any industry or geography – build a new cyber programme or supplement an existing one.
With an attachment point of 25 million outside the US or US$50 million for US domiciled companies, it will help organisations get the appropriate cyber cover they need rather than being constrained and only buying the cyber cover that a contracting market allows. Recognising that helping to improve risk management is also critical, the facility includes a risk improvement bursary of 2.5% of gross premium for all layers bound over 150,000 in premium.
The cyber challenge is not going away and ransomware in particular looks set to continue to target businesses wherever they operate and whatever they do. As a broker we’re committed to developing facilities like AXC and helping clients to better mitigate the risk.
Find out more about how the new Aon Excess Cyber Facility can help your business by downloading the AXC Product Sheet.
[1] Aon Cyber Insights for Insurers October 2020
The information contained herein and the statements expressed are of a general nature and are not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information and use sources we consider reliable, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
FP.GBC.357.JJ
