The cyber insurance market is one of the most dynamic segments of the insurance industry today, and Mike Palotay, president of Tokio Marine HCC – Cyber & Professional Lines Group, says there has never been a dull moment in this space.
The Tokio Marine HCC – Cyber & Professional Lines Group’s recent achievements have led to a 5-Star Cyber Insurance award from Insurance Business. In this interview, Palotay describes the state of the market and shares how the company helps its clients identify threats and reduce risks.
Palotay sees a demand-and-supply imbalance in the industry, alongside capacity constraints and staff shortages that have contributed to tight market conditions. Greater losses due to ransomware attacks have also been observed among some major insurers despite recent changes to rates and underwriting strategies.
To address security challenges, insurers like Tokio Marine HCC – Cyber & Professional Lines Group have to help customers proactively reduce risk by balancing “rate changes with improvements to risk selection and through scanning and risk analytics... We can’t solve problems with rate alone; otherwise, people are just not going to able to afford to purchase the coverage,” he says.
Although cyber attacks remain a major problem in the industry, more companies are implementing stronger security controls, such as multifactor authentication and endpoint detection, to improve their cybersecurity readiness.
Tokio Marine HCC – Cyber & Professional Lines Group helps brokers and clients mitigate risks by transforming itself into a cybersecurity company that maintains “a true risk management partnership between the carrier and the insured,” says Palotay.
“We have a lot of information at our disposal that can help our insureds. We can provide valuable guidance and risk mitigation services that can meaningfully reduce their risk. So, when we decided to become more of a cybersecurity company, we built an in-house threat intelligence team last year, and their job is to keep us informed of the leading drivers of loss and design ways to remediate or mitigate that risk on our portfolio.”
The threat intelligence team has developed proprietary tools that enable Tokio Marine to identify problems before costly attacks happen. An effective step is vulnerability scanning of insurance networks, which has enabled adjustments in technological capability, helping the insurer warn its clients about new threats as they are discovered.
Watch the full interview here