London-based cyber underwriter Intangic MGA has launched an industry-first cyber parametric policy that offers public corporations a fast recovery from the material impact stemming from cyber threats. Named CyFi, the policy is underwritten by AXA XL – the P&C and specialty risk division of AXA – and offers public corporations cover of up to £12.5 million in the UK market to cover losses from cyber breaches. Plans are also underway to extend this product to the US market.
CyFi works under two simple parameters: the level of malicious activity targeting a company, and a subsequent loss in value. If both triggers are met, the claim is then paid quickly. Both triggers ensure that all parties – Intangic and the policyholder – have a transparent view of the real-time monitoring of risk activity.
Intangic MGA said in a press release that the CyFi product is meant to complement and strengthen existing cyber indemnity cover, not replace it. The product also does not have a claims adjustment, and in the case of a material breach, policyholders can expect a fast payout in days as opposed to months.
Intangic MGA has analysed thousands of corporations over several years, and in the process found that companies struggling to manage the financial impact of cyberattacks have a 250% higher probability of suffering material losses than peers who had better cyberattack management. This new cyber parametric policy is designed to address the problem of constant cyberattacks as early as possible to lower the probability of customers suffering losses from attacks.
Intangic MGA founder and CEO Ryan Dodd (pictured above) attributes this to a difference in thinking about the problem.
“The security teams at large corporations have to manage cyber threats all day, every day. Our approach assesses cyber as a high-frequency risk. By accepting cyber attacks as ‘constant’, we can measure a link between how these attacks are managed and the financial impact they have on corporate operations,” he said.
According to Dodd, CyFi’s parametric triggers make this link visible, enabling fast recovery from covered material breaches. He also said the product has converted cyber risk to a language that the board of any company can understand.
AXA XL UK and Lloyd’s chief underwriting officer Luis Prato said that CyFi represents a simple solution to a complex problem.
“Intangic’s policy and the mechanisms behind it create a different way to approach risk and unlock capacity for cyber for large public corporations, helping them to strengthen their cyber risk programme,” he said.
In its continued efforts for the cyber market, November saw AXA XL appointing Aon alumnus Vanessa Leemans as its UK and Lloyd’s head of cyber.
What are your thoughts on this story? Please feel free to share your comments below.