has partnered with twoU.S. commercial lines groups on a series of cyber liability products and services,according to a review of dozens of product filings obtained by S&P Global MarketIntelligence.
The Lloyd'smarket company will reinsure cyber liability insurance to be written by certainsubsidiaries of AmTrust FinancialServices Inc. and AmericanFinancial Group Inc.'s majority-owned National Interstate Corp. as revealed by the initial filingsof forms, rates and rules in numerous states around the country.
The effectivedates for the AmTrust filings vary by state, and they generally range from May 1through Aug. 1. The American Financial and National Interstate filings list effectivedates in a general range of between April 7 and June 1.
"TheCyber Liability and Data Breach Response Coverage Part will be available as botha stand-alone coverage as well as an additional coverage under the Commercial PackagePolicy," AmTrust North America informed the Pennsylvania Insurance Departmentin one of the many rate/rule filingssubmitted about the product in recent weeks. "It offers a broad range of cybercoverage including Information Security and Privacy Liability arising from theft,loss or unauthorized disclosure of personally identifiable non-public informationor third-party corporate information that is in the care, custody or control ofthe insured."
The policyincludes provisions covering costs associated with various privacy breach responseservices, such as expert determination of the cause of a data breach, hiring a forensicinvestigator approved by the Payment Card Industry Security Standards Council andthe combination of public relations and crisis management.
"TheCyber Liability and Data Breach Response Coverage Part is designed to be applicableto our commercial policy business," AmTrust said. "The rates and ruleswere developed in conjunction with Beazley Group, who has years of experience writingcyber liability and will reinsure this exposure 100%."
The individualAmTrust entities that have submitted the filings includeAmTrust Insurance Co. of Kansas Inc., CorePointe Insurance Co., Milwaukee Casualty Insurance Co., Dallas-based ,Sequoia Insurance Co.,Technology Insurance Co. Inc.and Wesco Insurance Co.
The combinationof National Interstate Insurance Co.and subsidiary Vanliner InsuranceCo., meanwhile, informedPennsylvania regulators of their plan for a new cyber liability product with ratesand forms designed by "reinsurance partner" Beazley. The filing did notappear to contain additional information about the nature of the reinsurance relationship.
NationalInterstate told insurance buyers in an article dated March/April 2016 that cyberliability was one of the "exciting new value-added products" the companyplanned to offer.
"Wehave created a customized product to address cyber liability exposures, such astheft of personal information you have collected from others, potential penaltiesfor failing to maintain the most recently-regulated safeguards, and computer malwareand website content concerns," National Interstate Vice President of PassengerTransportation Matt Grimm said in the article. "Our cyber liability and databreach response policy will give you the tools needed to protect yourself from havinga breach, as well as crisis management guidelines to help you handle an emergency.With premiums starting as low as $150 a year, and limits available up to $1 million,this should be an automatic, 'sign me up' for your 2016 risk management strategy."
Noneof the AmTrust or National Interstate subsidiaries reported any values on the newcybersecurity portions of a new cybersecurity and identity theft insurance coveragesupplement to their 2015 annual statements. Several of the subsidiaries of RepublicCos. Inc., which AmTrust acquiredin April, and Security National Insurance reported token amounts of business classifiedon the supplement as identity theft coverage that is part of a package policy. SeveralAmerican Financial companies combined to report $8.2 million and $4.2 million instand-alone and packaged cybersecurity direct premiums written, respectively.
Beazley'sU.S.-domiciled unit, Beazley InsuranceCo. Inc., reportedhaving produced $61.7 million in direct premiums written for stand-alone cybersecuritypolicies in 2015 with 4,950 associated claims-made policies in force. The companyestimated that it generated another $5.7 million in cybersecurity direct premiumswritten associated with package policies.
The BeazleyGroup, upon announcinga new partnership with a Munich Re unit in April, described itself as "a pioneerin data breach response insurance and the largest insurer of cyber liability risksin the Lloyd's market." The National Interstate and Vanliner filings said Beazleyranks as "the second largest writer" of cyber liability coverage in theworld.