cyber liability insurance: an essential and urgently needed business investment

Speaker Firms and Organization:

Carr, McClellan, Ingersoll, Thompson & Horn, PLC

Helen A. ChristakosSenior Counsel and Chair of the IP, Privacy &

Data Security Group

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Presented By:

September 23, 2014

1

Partner Firms:

Walker Wilcox Matousek LLPCeleste M. King

Founding Partner

US Department of Homeland SecurityTom Finan

Senior Cybersecurity Strategist and Counsel

HCC Insurance Holdings, Inc.Brook Dutcher

Underwriting Manager

CRC Insurance Services, Inc.Clay Segrest

Professional Liability Broker

US Department of Homeland Security

September 23, 2014

2

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Partner Firms:

September 23, 2014

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US Department of Homeland Security

For companies that require the highest caliber of legal expertise coupled with a responsive and results driven approach, Carr McClellan is the boutique California business and business litigation law firm offering top-tier expertise and a full range of legal services. Carr McClellan serves both public and private companies, staying focused on the business objectives while giving clear advice and maintaining a flexible and practical approach to solving our clients’ business and legal matters. We remain deeply engaged in our clients’ businesses, tackling every issue with energy and initiative and we offer advice and solutions that work in the real world.

Partner Firms:

September 23, 2014

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Walker Wilcox Matousek LLP, a Chicago-based law firm with offices in Houston, Texas, is at the forefront of the dynamic area of privacy law. WWM counsels clients on coverage for privacy risks under privacy, technology, first party, third party CGL policies and reinsurance contracts. WWM has been involved with privacy risks involving law firms, hospitals, financial institutions, retail, non-profit organizations, municipalities and schools.

Headquartered in Houston, Texas, HCC Insurance Holdings, Inc. is a leading specialty insurer with offices in the United States, the United Kingdom, Spain and Ireland. As of March 31, 2014, HCC had assets of $10.6 billion and shareholders' equity of $3.8 billion. HCC's major domestic and international insurance companies have financial strength ratings of "AA (Very Strong)" from Standard & Poor's Corporation, "A+ (Superior)" from A.M. Best Company, Inc., "AA (Very Strong)" from Fitch Ratings, and "A1 (Good Security)" from Moody's Investors Service, Inc.For more information about HCC, please visit http://www.hcc.com.

About HCC SpecialtyHeadquartered in Wakefield, Massachusetts, HCC Specialty is among the industry’s leading managing underwriters of innovative specialty insurance products, including: high limit disability, professional liability, public entity, crisis management, contingency, DIC, prize indemnity and special program business. HCC Specialty, a division of HCC Insurance Holdings, Inc., is comprised of HCC Specialty Underwriters, Inc., Professional Indemnity Agency, Inc., G.B. Kenrick & Associates, Inc. dba Kenrick Corporation, InsPro Corporation and HCC Public Risk. For more information please visit http://www.hcc.com/specialty

http://theknowledgegroup.org/%22http:/www.hcc.com/%22

http://theknowledgegroup.org/%22http:/www.hcc.com/specialty/%22

Partner Firm:

September 23, 2014

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CRC was founded in 1982 and specializes in Property, Casualty, and Professional risks. CRC’s extensive market experience allows it to draw on a wide range of resources from across the country and around the world. Created through the combination of CRC and Crump in April 2012, the new CRC Wholesale Group expanded to 1,800 employees and 50 offices nationwide. CRC’s Professional Liability Department - CRC-PRO - is a mainstay leader in Surplus Lines Market placement and innovation.

Brief Speaker Bios:

Tom Finan

Tom Finan is a Senior Cybersecurity Strategist and Counsel with the Department of Homeland Security’s National Protection and Programs Directorate, NPPD, where he leads work on cybersecurity insurance and cyber risk management in support of implementation of Executive Order 13636, “Improving Critical Infrastructure Cybersecurity.” Tom established DHS’ Cybersecurity Insurance webpage, accessible through the search engine of your choice, which includes a series of readout reports that describe DHS’ efforts in these areas. Previously, Tom led the effort to develop a resiliency-focused risk analysis and modeling office for NPPD that examines both cyber and physical threats to critical infrastructures, systems, and the public. Prior to his arrival at DHS, he served as the Staff Director and Counsel for the Subcommittee on Intelligence, Information Sharing and Terrorism Risk Assessment with the U.S. House Committee on Homeland Security where he advised the Subcommittee Chair, Congresswoman Jane Harman. Tom previously worked as an attorney for the FBI and in private litigation practice.

September 23, 2014

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Helen A. Christakos

Helen is an experienced business lawyer who represents clients in commercial transactions involving cutting edge intellectual property (IP) and technology issues. She brings a practical, business-oriented approach to advising companies ranging from global public companies to emerging start-up ventures in developing, licensing, selling, acquiring, protecting and commercially exploiting intellectual property and technology assets.

She also devotes a significant portion of her practice to advising clients in a wide variety of industries on privacy, data security and ecommerce matters. Helen works with companies to assess their legal obligations and risks and helps design and implement practical, cost-effective plans for mitigating such risks. Helen conducts numerous CLE presentations to update in-house counsel on changes in privacy and data security law.

Brief Speaker Bios:

Celeste M. King

Celeste’s experience is with privacy risks and insurance. She advises insurers and reinsurers on coverage for privacy risks and breaches involving first and third party CGL policies, drafts policies and underwriting guidelines and prepares breach response strategies. Celeste counsels clients on state and federal regulations involving privacy laws, developments in case law and emerging issues such as standing to sue and recovery of reputational damages. She regularly deals with privacy risks to industries such as health care, legal and other professions, financial institutions, retail, insurance agents, public entities, education and energy.

Celeste is also an experienced reinsurance lawyer, counseling clients on treaty and facultative risks and representing clients in reinsurance litigation and arbitration.

September 23, 2014

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Brook Dutcher

Brook Dutcher is Specialty Underwriting Manager-Technology E & O/Cyber Insurance product manager with HCC Specialty in New York. Brook focuses on new product development, product growth and strategy for the company. Previously he was the Technology E & O/Cyber Insurance product manager for NAS Insurance in California. He underwrote various lines and programs with Axis Insurance and with ACE Westchester in Atlanta. Prior to his career in insurance, Brook worked extensively in banking.

Brief Speaker Bios:

Clay Segrest

Mr. Segrest is a wholesale broker for CRC Insurance Services, Inc. specializing in Professional Liability, Executive Risk/Management Liability, and Network Security & Privacy Liability. He has played an instrumental role in his company’s efforts to expand its presence and influence in the Cyber Security & Privacy Liability marketplace. He has lectured the Alabama Independent Insurance Agents Association on this topic and he has helped lead CRC’s commitment to the growth and development of Cyber Liability products for producers and their clientele. As demand for Cyber coverage increases, CRC continues to provide complex risk solutions for insured’s realizing the magnitude of the exposure. Mr. Segrest received his Masters of Business Administration Degree from the University of Alabama at Birmingham and his undergraduate degree from Birmingham-Southern College.

September 23, 2014

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► For more information about the speakers, you can visit: http://theknowledgegroup.org/event_name/cyber-liability-insurance-an-essential-and-urgently-needed-business-investment/

http://theknowledgegroup.org/event_name/cyber-liability-insurance-an-essential-and-urgently-needed-business-investment/

http://theknowledgegroup.org/event_name/cyber-liability-insurance-an-essential-and-urgently-needed-business-investment/

Cyber Liability Insurance is a relatively new product that is developing rapidly due to increasing frequency and sophistication of cyber-attacks. Stricter regulation and enforcement of cyber crime are making purchase of Cyber Liability & Data Risk Insurance a necessity for many companies.

Experian Inc. reports that almost 70% of business owners have yet to purchase some sort of insurance against cyber attack even though many business owners know cyber attack is a serious business risk. Many companies face significant costs from litigation following cyber attacks and even face the prospect of bankruptcy. In fact, The Gartner Group reports that 40% of all businesses experiencing data breaches are out of business within 6 months and 51% end business within two years following such cyber attacks.

In this webinar, experts in the fields of cyber crime, cyber crime regulation and enforcement, insurance, cyber law, and network systems security will explain the risks, the types of insurance, and why it is increasingly essential to purchase such insurance. Special topics for discussion include:

• Cyber Security Insurance Laws and Regulations• Cyber Liability Market and Claims Trends• Assessing Cyber Liability and Risks: Breach Litigation Issues• Cyber Insurance Types and Coverage Needs• Cyber Insurance Policies De-mystified• Subrogation: Vendor and Business Partner Liability Claims• Benefits of International Vulnerability Purchase Program

September 23, 2014

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Featured Speakers:

September 23, 2014

13

SEGMENT 1:

Tom FinanSenior Cybersecurity Strategist and CounselUS Department of Homeland Security

SEGMENT 2:

Helen A. ChristakosSenior Counsel and Chair of the IP, Privacy & Data Security GroupCarr, McClellan, Ingersoll, Thompson & Horn, PLC

SEGMENT 3:

Celeste M. KingFounding PartnerWalker Wilcox Matousek LLP

SEGMENT 4:

Brook DutcherUnderwriting ManagerHCC Insurance Holdings, Inc.

SEGMENT 5:

Clay SegrestProfessional Liability BrokerCRC Insurance Services, Inc.

Introduction

Tom Finan is a Senior Cybersecurity Strategist and Counsel with the Department of Homeland Security’s National

Protection and Programs Directorate, NPPD, where he leads work on cybersecurity insurance and cyber risk management

in support of implementation of Executive Order 13636, “Improving Critical Infrastructure Cybersecurity.” Tom established

DHS’ Cybersecurity Insurance webpage, accessible through the search engine of your choice, which includes a series of

readout reports that describe DHS’ efforts in these areas. Previously, Tom led the effort to develop a resiliency-focused risk

analysis and modeling office for NPPD that examines both cyber and physical threats to critical infrastructures, systems,

and the public. Prior to his arrival at DHS, he served as the Staff Director and Counsel for the Subcommittee on

Intelligence, Information Sharing and Terrorism Risk Assessment with the U.S. House Committee on Homeland Security

where he advised the Subcommittee Chair, Congresswoman Jane Harman. Tom previously worked as an attorney for the

FBI and in private litigation practice.

September 23, 2014

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SEGMENT 1:


Cybersecurity Insurance: DHS/NPPD Workshop Series

Cyber Liability Insurance Webcast

September 23, 2014

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SEGMENT 1:


Strategic Background

• To what extent can the cybersecurity insurance market offer relevant coverage at reasonable prices

in return for an insured’s adoption of cyber risk controls and procedures that improve its risk posture?

• Fire insurance carriers require sprinkler and other fire suppression systems as conditions for

coverage.

• Cybersecurity insurance what comparable risk controls and processes apply to cyber?

September 23, 2014

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SEGMENT 1:



• The third-party cybersecurity insurance market covers losses that a company causes to third parties,

typically costs arising from a data breach (e.g., monetary damages arising from privacy and network

security claims, some civil fines and penalties, attorneys’ fees).

• The first-party cybersecurity insurance market covers a company’s own, direct losses from a cyber

incident (e.g., lost profits, loss of intellectual property, loss of reputation, extraordinary costs

associated with reconstituting damaged data and systems).

September 23, 2014

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SEGMENT 1:



• Four DHS/NPPD workshops since October 2012 have convened key stakeholders to engage on this

topic.

• Participants identified key challenges to a more robust first-party market that provides coverage for

cyber-related critical infrastructure loss:

Lack of actuarial data

Lack of common cyber management best practices, metrics, and standards

Lack of understanding of critical infrastructure “interconnectedness” and related domino effects

that could result from a cyber attack

Confusion about applicability of current insurance

September 23, 2014

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SEGMENT 1:



• Given these shortcomings, many carriers instead currently focus on the effectiveness of an

organization’s cyber risk culture when assessing whether to provide cybersecurity insurance

coverage and in what amounts.

• The Four Pillars:

Executive Leadership

Education and Awareness

Technology

Relevant Information Sharing

September 23, 2014

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SEGMENT 1:



• Effective cyber risk culture takeaways:

The business case for investing against cyber risk has not been made

• Conveying cyber risk in terms of financial and reputational harm is difficult

• True enterprise risk management (ERM) programs should address cyber risk

Need for cost/benefit research on cybersecurity solutions

Appropriate expectations for insurance in the cyber risk management space given competition

and uncertainty concerns

September 23, 2014

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SEGMENT 1:



• Carriers reference three core questions when assessing each of these pillars and determining

whether a company is a safe insurance “bet”:

Does the company know what cyber incidents it has actually experienced based on its own

data and reports from outside sources?

Does the company know – through public sources and private conversation – what kinds of

cyber incidents are happening to other companies like it?

What informed cyber risk management investments is the company making based on this data?

September 23, 2014

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SEGMENT 1:



• EO 13636 – “Improving Critical Infrastructure Cybersecurity”

• Impact of EO 13636 and NIST Cybersecurity Framework on cybersecurity insurance market:

Risk management tool – common taxonomy that supports an enhanced underwriting roadmap

Potential boon to market capacity – stemming the stand-alone trend

Potential cost differentiator – Framework users and non-users

September 23, 2014

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SEGMENT 1:


Cybersecurity Insurance: Insurance Industry Working Session

• In January 2014, the White House requested that DHS/NPPD lead a series of cybersecurity

insurance incentive discussions to support EO 13636.

• DHS/NPPD initiated the new discussions with an insurance industry-only working session in April

2014 centering on three topics:

Cyber incident information sharing (creation of a cyber incident data repository)

Cyber incident consequence analytics

Cyber-inclusive ERM programs

September 23, 2014

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SEGMENT 1:


DHS Cybersecurity Insurance Webpage:

http://www.dhs.gov/publication/cybersecurity-insurance.

September 23, 2014

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SEGMENT 1:


http://www.dhs.gov/publication/cybersecurity-insurance

Introduction

Helen is an experienced business lawyer who represents clients in commercial transactions involving cutting edge

intellectual property (IP) and technology issues. She brings a practical, business-oriented approach to advising companies

ranging from global public companies to emerging start-up ventures in developing, licensing, selling, acquiring, protecting

and commercially exploiting intellectual property and technology assets.

She also devotes a significant portion of her practice to advising clients in a wide variety of industries on privacy, data

security and ecommerce matters. Helen works with companies to assess their legal obligations and risks and helps design

and implement practical, cost-effective plans for mitigating such risks. Helen conducts numerous CLE presentations to

update in-house counsel on changes in privacy and data security law.

In addition to her law practice, Helen is an Adjunct Professor at Santa Clara University School of Law, where she teaches

J.D. and LL.M. level classes in Technology and Intellectual Property Licensing.

September 23, 2014

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SEGMENT 2:


State Data Security Breach Notification Laws

1. What do they cover?

• Unencrypted personal information

• Personal Information generally includes first name/first initial and last name in combination

with:

i. SS Number

ii. Drivers License Number

iii. Financial Account Number + code

iv. Credit Card Number + code

v. Debit Card Number + code

2. What is required in the event of a breach?

• Requirements differ from state to state

• Remedies differ from state to state

September 23, 2014

26

SEGMENT 2:


Amendment to California’s Data Security Breach Notification Law

1. Went into effect January 1, 2014

2. Law now covers on-line accounts

3. Electronic notice may now be given in certain circumstances

September 23, 2014

27

SEGMENT 2:


What should your Cyber Insurance Policies Cover

1. Both first-party and third-party risks

2. Unencrypted devices

3. Data breaches caused by third parties

4. Data transmissions outside the US

5. PCI liability (if applicable)

September 23, 2014

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SEGMENT 2:


Introduction

Celeste’s experience is with privacy risks and insurance. She advises insurers and reinsurers on coverage for privacy risks

and breaches involving first and third party CGL policies, drafts policies and underwriting guidelines and prepares breach

response strategies. Celeste counsels clients on state and federal regulations involving privacy laws, developments in

case law and emerging issues such as standing to sue and recovery of reputational damages. She regularly deals with

privacy risks to industries such as health care, legal and other professions, financial institutions, retail, insurance agents,

public entities, education and energy.

Celeste is also an experienced reinsurance lawyer, counseling clients on treaty and facultative risks and representing

clients in reinsurance litigation and arbitration.

Celeste is licensed in Illinois and District of Columbia and is AV Rated by Martindale-Hubbell.

September 23, 2014

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SEGMENT 3:


Insurance For Cyber Risks

September 23, 2014

30

SEGMENT 3:


Know The Insured’s Risk

- Federal and State Regulations

- International Considerations

- Industry Standards (e.g. PCIC)

- Professional Regulatory Agencies

- Contracts-Vendor Management

- Reputation

September 23, 2014

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SEGMENT 3:


Know The Coverage Already In Place

•CGL Coverage

-New ISO Exclusion

•First Party Coverage

•Directors and Officers Coverage

•Professional Liability

September 23, 2014

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SEGMENT 3:


Know The Coverage Needed

• What are the Maximum Limits

• Sublimits

• Crisis Management (Notification, PR)

• Regulatory Fines

• Business Interruption

• Defense Expenses

• Cyber Extortion

September 23, 2014

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SEGMENT 3:


Cyber Coverage Issues

• Terrorism or Hacktivism or Cyber War

• Unauthorized collection of data

• Contractual liability

• Company-wide training

• Paper/non-electronic breaches covered

• Confidentiality Agreements and NDAs

• Cloud

• International laws

September 23, 2014

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SEGMENT 3:


Keep Current With Changes

• Wordings Change With Technology

–”internet of things”

- bodily injury (e.g. medical devices)

• Court opinions interpreting wordings

• Changes in state and federal laws

• Competition in the marketplace

September 23, 2014

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SEGMENT 3:


Challenges to Insurers and Reinsurers

• Uncertainty of the legal framework

• Cyber is a business issue, not only IT

• Pricing the risk

• Keeping the privilege

• Selecting the experts: who and when

• Aggregation of multiple losses

September 23, 2014

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SEGMENT 3:


September 23, 2014

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Introduction

Brook Dutcher is Specialty Underwriting Manager-Technology E & O/Cyber Insurance product manager with HCC Specialty

in New York. Brook focuses on new product development, product growth and strategy for the company. Previously he was

the Technology E & O/Cyber Insurance product manager for NAS Insurance in California. He underwrote various lines and

programs with Axis Insurance and with ACE Westchester in Atlanta. Prior to his career in insurance, Brook worked

extensively in banking.

September 23, 2014

40

SEGMENT 4:


The Value of Cyber Insurance

An overview from a carriers perspective

September 23, 2014

41

SEGMENT 4:


Coverage Development

September 23, 2014

42

SEGMENT 4:


Breach Response and Crisis Management as stand alone coverage

Technology E & O including 3rd party

Privacy & Security and eventually 1st party

coverages

Technology E & O Products

Specialized custom liability coverage

Diverse approaches to the coverage

September 23, 2014

43

SEGMENT 4:


Breach response

with coverage for

the actions of the board, including the

CIO

D & O

Breach response coverage

with 3rd party

coverage for the

performance of services

MPL

1st and 3rd party

coverages

Technology E & O

Breach response

products to address

computer crime and

fraud

Financial Lines

Cyber insurance

coupled with Media

related coverage for

IP, Content and related

services

Media

Large Limit Breach

Response Products

Catastrophic

Why include cyber in my portfolio?

September 23, 2014

44

SEGMENT 4:


Cost of doing business

Increase in direct and indirect costs

Costs of notification required,

Cost of defense, forensics, regulatory action

Cyber insurance addresses contemporary business exposures in a unique fashion

Clearer boundaries are emerging and being defined between lines of coverage

Coverage is becoming a necessity

The US accounts for more data incidents than any other country. Two states in the US account for the majority of those incidents. The present interpretation of market conditions indicate all businesses will have some kind of incident.

Business Posture

September 23, 2014

45

SEGMENT 4:


Most businesses have been reactionary to cyber related incidents despite efforts to be proactive.

Inherent flaws in the fundamentals of programming have forced businesses to re-evaluate prioritization of exposures and value.

Measurable effects to share value and the security of C-Suite positions have forced organizations to review business methodology.

The Shift from Reactive to Proactive Posture

September 23, 2014

46

SEGMENT 4:


Global Exchange of Information

Human Error

State Sponsored

Activity

Political Activism

Criminal Enterprise

Constricting Regulatory Guidelines

Quarrelsome Clients

• Emerging Case Law

• State and Federal AG

• Speculative Punitive Damages

• Monitization of IP and PII

• Sharing of information

A culture of accountability

September 23, 2014

47

SEGMENT 4:


US also experiences the highest costs associated with lost business in the event of a breach inspiring businesses to adhere to higher standards

Costs of notification are significantly higher in the US causing a re-evaluation of costs to conduct business in the US and the exposures of conducting business abroad.

Companies are compelled to retain customers as organizations with a higher customer turn over and churn rate were more likely to experience higher breach costs.

Data now shows companies with a strong security posture can reduce costs per record significantly in the event of a breach

A culture of accountability

September 23, 2014

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SEGMENT 4:


Compliance StabilityCorporate Culture of

Accountability

Written ProceduresContinuity of Operations

Vetting of Contractors

Incident Response

PlanMinimal Down Time

Proactive Protocol for Vulnerability Managemen

t

Global Market Place

September 23, 2014

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SEGMENT 4:


Focus of coverage tends to vary from region to region. The issues revolving around ownership of data and the responsibility of data continue to move to the forefront.

U.S. represents, by far, the greatest number of

incidents, the largest amounts of data per

incident and the greatest costs per incident.

International groups are collaborating on standards. Japan to release new ISO guidelines for Cloud Utility

The international legal community is becoming

more fluent in notification responsibilities from one

nation to another

Access to Solutions

September 23, 2014

50

SEGMENT 4:


Pre-emptive screening or

auditing

Experienced breach coach

Access to forensic service providers

Call centers at your disposal

Experienced Claim Handling

Forensic accountants to

quantify interruption costs

Public Relations Firms to put out media firestorms

A few parting words

September 23, 2014

51

SEGMENT 4:


The market will continue to grow and evolve

The exposure will continue to grow and evolve.

For more information on HCC Specialty visit:

http://www.hcc.com/specialty/



Introduction

Mr. Segrest is a wholesale broker for CRC Insurance Services, Inc. specializing in Professional Liability, Executive

Risk/Management Liability, and Network Security & Privacy Liability. He has played an instrumental role in his company’s

efforts to expand its presence and influence in the Cyber Security & Privacy Liability marketplace. He has lectured the

Alabama Independent Insurance Agents Association on this topic and he has helped lead CRC’s commitment to the growth

and development of Cyber Liability products for producers and their clientele. As demand for Cyber coverage increases,

CRC continues to provide complex risk solutions for insured’s realizing the magnitude of the exposure. Mr. Segrest

received his Masters of Business Administration Degree from the University of Alabama at Birmingham and his

undergraduate degree from Birmingham-Southern College.

September 23, 2014

52

SEGMENT 5:


Expanding Threats

• Increased sophistication of criminal cyber-attacks

• Insecure websites, databases and health information exchanges that are highly vulnerable to insider

and outsider threats.

• Employee increased use of personal unsecured mobile devices (smart phones, laptops, i-Pads) to

connect to company networks or enterprise systems

• Regulatory Compliance

• Cloud Services (40% of organizations use the cloud heavily) -- Common Applications & Services:– Backup and storage– Productivity– File-sharing and collaboration– Accounting and payroll data– Medical records and billing

September 23, 2014

53

SEGMENT 5:


Defining Your Perimeter

September 23, 2014

54

SEGMENT 5:


Customers

Contracted Business Partners

Employees

Management

Claim Payouts by Type of Cost

145 Data Breach Claims -- 88 Claims Payouts -- $84M Payout (N=88)

September 23, 2014

55

SEGMENT 5:


50%

36%

13%

1%

Crisis Services

Legal Defense

Legal Settlement

PCI Fines and Regulatory Fines

Smallest Claim Payout: $2,560Largest Claim Payout: $20,000,000Average Payout: $954,000

Crisis Service Costs(N=66)

September 23, 2014

56

SEGMENT 5:


50%

36%

13%1%

Crisis ServicesLegal De-fense

Forensics Notification Credit Monitoring Legal Guidance0

10

20

30

40

50

60

5042

33

53

September 23, 2014

57

SEGMENT 5:


Legal Defense & Settlement Costs(N=40)

50%

36%

13%

1%Crisis ServicesLegal De-fense

Defense Settlement Both0

5

10

15

20

25

30

35

4036

29

10

September 23, 2014

58

SEGMENT 5:


16%

12%

1%

12%

27%

29%

2% 1%

Credit/Debit Card

Financial

N/A

Other

PHI

PII

Trade Secrets

Unknown

Percentage of Claims by Data Type(N=140)

Percentage of Claims by Cause of Loss

September 23, 2014

59

SEGMENT 5:


(N=140)

19%

3%

21%

10%8%

8%

12%

5%

4%

6%4%

Hacker

Improper data collection

Lost/stolen laptop or device

Malware/Virus

Other

Paper records

Rogue employee

Staff mistake

System glitch

Theft

Third-party vendor

September 23, 2014

60

SEGMENT 5:


Percentage of Claims by Business Sector(N=140)

7% 3%

15%

29%

3%6%

3%

11%

13%

8%

2%

Education

Entertainment

Financial Services

Healthcare

Hospitality

Non‐Profit

Other/Unknown

Professional Services

Retail

Technology

Telecommunications

September 23, 2014

61

SEGMENT 5:


Percentage of Claims by Revenue Size(N=140)

22%

13%

23%

12%

1%

4%

25%

Nano Cap (< $50M)‐Micro Cap ($50M $300M)‐ ‐Small Cap ($300M $2B)‐ ‐Mid Cap ($2B $10B)‐ ‐Mega Cap (> $100B)‐Large Cap ($10B $100B)‐ ‐Unknown

Breaking the Buyer Barrier

Sales Challenges

• The Long Cyber Sale Cycle & producer endurance

• Realizing the magnitude of the exposure and the value of the products available

– Asking the right questions to the right people

– Connecting with the IT Department

• Product education & coverage expertise

– Value added services

• Financial Constraints

– Insurance Budget

September 23, 2014

62

SEGMENT 5:


Breaking the Buyer Barrier

Logistics of Obtaining Cyber Coverage

• Application Process -- providing a picture of the overall network perimeter

• Underwriting Community Concerns -- slowly requiring more information before finalizing terms &

conditions

• Underwriting Submission Information & Rating

– Class -- Type of business or service provided

– Revenue -- Revenues vs Record Count. What is a record?

– Amount of information at risk / Number and size of records / Nature of records

• Answering Cyber Questions

September 23, 2014

63

SEGMENT 5:


Cyber Progress

September 23, 2014

64

SEGMENT 5:


Discovering a Data Breach

Increased Awareness & Education

Securing Devices

Valued Partner & Trusted Business Advisor

► You may ask a question at anytime throughout the presentation today. Simply click on the question mark icon located on the floating tool bar on the bottom right side of your screen. Type your

question in the box that appears and click send.

► Questions will be answered in the order they are received.

Q&A:

September 23, 2014

65

SEGMENT 1:


SEGMENT 2:


SEGMENT 3:


SEGMENT 4:


SEGMENT 5:


September 23, 2014

66

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