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Risk. Reinsurance. Human Resources.
Aon Risk SolutionsFinancial Services Group | Professional Risk Solutions
Cyber Risk Solutions
2 | Aon Professional Risk Solutions
Aon Professional Risk Solutions | 1
Table 1.1 – Percentage of PP&E and Information Assets Covered by Insurance
Table 1.2 – Cyber Insurance: Global Gross Written Premium
Cyber risk is no longer considered an emerging risk. Every organization should consider the financial statement impact of cyber exposures.
In a best case scenario, a successful cyber attack will highlight the IT system weaknesses of an attacked company. In a worst case scenario, a cyber attack shuts down company operations, stolen data is sold on the dark web and financial losses are suffered by both the company and the company’s customers. The key questions that every organization should ask is:
•Can we identify and quantify the damages from a successful cyber attack?
•Beyond IT solutions, how do we protect ourselves from cyber risk?
In the Aon-sponsored 2015 Global Cyber Impact Report, conducted by the Ponemon Institute, we found that cyber is one of the fastest growing risks for companies across the globe, as mobile technologies advance and cloud computing, corporate bring-your-own-device policies, big data analytics and the Internet of Things are becoming increasingly widespread. About 37 percent of surveyed companies have experienced a “material or significantly disruptive security exploit or data breach” one or more times during the past two years, and the average economic impact of the event was USD 2.1 million , although the range varied between USD 0 and over USD 200 million.
Despite similar probable maximum loss valuations for tangible and intangible assets, organizations insure them very differently, as indicated in Table 1.1.
While a cyber attack often causes disruption to business and IT operations, catastrophic cyber losses can also result in potential director’s and officer’s liability allegations. In the wake of numerous publicly reported material incidents in 2015, cyber insurance gross written premium is forecast to grow (as indicated in Table 1.2), at the same time insurance carriers are limiting capacity and coverage, while raising premiums for certain industry classes, such as large retail, healthcare and financial institutions.
Organizations need to consider cyber assets and exposures in the context of financial statement impact compared to historical tangible assets and exposures.
Defining the Impact Death. Taxes. Cyber Attack?
0%
10%
20%
30%
40%
50%51%
60%
12%
The percentage of potential loss to PP&E assets covered by insurance
The percentage of potential loss to information assets covered by insurance
$02002
Gross Premium in $MM
2004 2006 2010 2013 2014 2018* 2020*
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
2018: Estimated by PWC 2020: Estimated by ABI research
2 | Aon Professional Risk Solutions
Unique Solutions from a Team of Recognized Experts
The Aon Professional Risk Solutions team is uniquely qualified to help clients identify, track and mitigate today’s cyber threats. Recognized as one of the industry’s premier resources in cyber risk management, the team includes a dedicated group of more than 50 trained professionals with a strong technical aptitude, enhanced coverage expertise, deep carrier relationships, and claims handling capabilities. Team members collaborate and share expertise in a geographically aligned model, with colleagues based in San Francisco, Denver, Chicago, Miami, New York, London and Bermuda. Our approach includes the following:
Strategic Meetings/Discussions – Aon takes a collaborative approach with our clients to identify and analyze exposures. We ensure that our clients’ unique exposures are addressed via risk transfer or alternative solutions.
Submission Development – Aon works with our clients to obtain relevant, necessary and favorable underwriting information to present to markets. We coach our clients through underwriting meeting preparation, ensuring the best possible presentation to the underwriting community.
Legal Expertise – Our Claims Management, Advocacy and Legal Practice is made up of over 30 attorneys and claims advocates who assist our clients and brokerage teams in understanding exposure trends, negotiating policy wording and facilitating claims notification and recovery. We recognize that the contract must perform, and as such feel that the strength of our legal expertise around cyber policy wording and claims is a key part of our value.
Strategic Negotiations and Placement – Aon utilizes proven and sophisticated negotiation strategies and leveraging techniques to build broad program structures and push the marketplace for superior terms and pricing.
50+
1500
200 $400M+global dedicated
professionals
PRS clients
cyber claims handled since 2012
in premium placed in 2015
More than
Over
Dedicated cyber professionals in U.S.,
London and Bermuda
Industry specialist brokers aligned with
Aon industry practices
Aon Professional Risk Solutions | 3
Industry Practices
Entertainment/ Hospitality
Financial Institutions
Food, Agriculture &
Beverage
Public Sector
TechnologyHigher Education
Real Estate/ Construction
Energy/Power
Industrials & Materials/
AutomotiveHealthcare
Retail Transportation & Logistics/Rail
Life Sciences
4 | Aon Professional Risk Solutions
A Proven Approach to Cyber Coverage
The Aon Cyber Solutions Framework helps clients identify, address and respond to their unique cyber risks.
Our solutions framework broadens the typical scope for addressing cyber risk, as our services go beyond risk transfer. We do this by:• engaging with our clients for pre-breach
planning and incident response services;• identifying and quantifying the unique
risks that they face;
• assisting our clients with the selection and implementation of appropriate risk transfer solutions; and
• ensuring the continuity of operations through claims consulting.
Cyber risk is not static, and as such our framework serves as a tool for holistic cyber risk management.
Discover Develop
Risk Identification
Risk Quantification
Risk Mitigation& Management
RiskRetention
ClaimsConsulting
SolutionAssessment
& Design
RiskTransfer
Deliver
Cyber Evaluation & Assessment
Pre Breach Planning
Aon Cyber Tool www.aoncyberdiagnostic.com
Cyber Coverage Gap Analysis
Aon Proprietary Peer Benchmarking
Aon Cyber Insight Model
Cyber Risk Loss Modeling
Risk Financing Decision Platform
Aon Benfield Reinsurance Capacity
Network Security Breach Table Top Exercise
D&O Cyber Risk Evaluation
Captive & Insurance Management
Claims Advocacy
Claims Processing
Incident Response Services
Network Business Interruption Claims Preparation
Aon Professional Risk Solutions | 5
A Menu-Based Analytic ApproachCyber analytics provide companies with organization-specific data points to evaluate various approaches to cyber risk, via risk transfer or risk retention solutions. Cyber analytics become especially meaningful when overlaid with traditional peer benchmarking. We believe in a menu-based approach, based on the depth, breath and scope of desired analysis. As such, we provide analytic tools to fit our clients’ needs. We have numerous solutions available through Aon, as well as through relationships with partner vendors.
Aon Cyber Insight Model
The Aon Cyber Insight Model is a tool which allows for informed decision making based on the following metrics:
• Total Cost of Risk Cyber Program Analysis
• Severity of First and Third Party Cyber Losses
• Sub-limit Exhaustion Analysis
• Probability of Cyber Loss
Aon Global Risk Consulting
• Risk Financing Decision Platform - Actuarial analysis that builds upon the Cyber Insight Model to include Network Business Interruption.
• Cyber Evaluation and Risk Quantification –
– Benchmarks an organization’s information security program to international best practices and standards, and identifies material gaps and deficiencies for remediation
– Aon’s X-V Analysis: Leverages property loss experience to quantify maximum foreseeable and expected loss metrics using scenarios identified in the cyber evaluation process, taking into account operational models, financial performance, and business continuity and mitigation strategies
Unlimited losses represent exposure to Cyber losses, as if no insurance were purchased
Based on ABC Corporation’s Cyber Insight, the biggest First Party exposure is Notification costs.
Based on ABC Corporation’s Cyber Insight, the biggest Third Party exposure is Class Action.
6 | Aon Professional Risk Solutions
21 Days
Placement strategy discussion
Gather underwriting information
Create coverage specifications via
priority Matrix
7 Days
Insurers evaluate submission/
Underwriting meetings
Negotiation Period – Time will depend
upon the size of the tower
New Program Incepts
14-21 Days 30-45 Days
Aon Strategic Market Approach – Differentiating our ClientsThe key to a successful go to market strategy is to differentiate our clients. We do this by executing on the following:
• Placement Strategy Discussion
• Submission Creation
• Coverage Priority Matrix
• Underwriting Meeting Preparation – Aon/Client Discussion
• Market Meeting or Conference Call
• Worldwide Market Access
Aon Professional Risk Solutions | 7
Cyber Solutions and Services
Aon Net News®
Aon Net News®, is a weekly electronic newsletter focused on identifying exposure and insurance issues via original and third party intellectual capital content in the areas of: • Privacy and Security Cyber Liability• Miscellaneous Commercial Professional Liability• Technology Errors and Omissions• Media Liability• Intellectual Property Infringement
Cyber Diagnostic Tool
Aon’s proprietary online questionnaire compares an organization’s cyber preparedness versus peers. The tool helps identify the key internal and external factors that may affect an organization’s level of exposure to cyber risk, gives insight into the relevant cyber risk drivers, and provides practical guidance on a cyber governance framework. The report addresses five key risk areas: • Overall Profile • IT Infrastructure & Hardware• IT Application & Software• Data Privacy Governance• Cyber Attack, System Failures & Data Breaches
https://www.aoncyberdiagnostic.com/
Cyber Diagnostic Report
8 | Aon Professional Risk Solutions
Aon Client Promise
The Aon Client Promise framework includes the five pillars of our promise, a comprehensive training curriculum, and a robust methdology for ensuring a consistent client experience.
Aon Client Promise
Comprised of five pillars—partnership, expertise, innovation, excellence, and results—the Aon Client Promise articulates the commitment we make to our clients.
Aon Client Promise Academy
The Academy offers unique learning experiences focused on listening for and responding to client needs, building knowledge of the full breadth of Aon capabilities, and understanding the pillars of the Aon Client Promise.
Aon Client Promise Methodology
Discover We will collaborate to understand both your near- and long-term business priorities, how we can add value to your organization, and help you respond to changing market dynamics.
Develop We will jointly author a plan to define how we will work together during the year, outline our commitments to you, and define how we will measure our success.
Deliver We will follow through on our plan, executing with excellence and tracking outcomes.
Review We will seek your input on how we are doing both through informal feedback sessions and annual surveys.
Contacts
First [email protected]
First [email protected]
First [email protected]
First [email protected]
First [email protected]
First [email protected]
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About the Business Unit
Contacts
We’re here to empower results Aon professionals can provide your organization with the experience, tools and deep industry expertise required to address today’s cyber threats. Contact the following representatives to learn more about specialized solutions from the Aon Professional Risk Solutions team.
Christian HoffmanU.S. Professional Risk Solutions Team Leader [email protected] +1 212.441.2263
Stephanie Snyder TomlinsonU.S. Cyber Sales Leader [email protected] +1 312.381.5078
Brent RiethWest Coast Leader [email protected] +1 415.486.7162
Eric SeyfriedEast Coast [email protected] +1 212.441.1406
Stephanie DingmanCentral Leader [email protected]+1 312.381.5146
About Aon Aon plc (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 72,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world’s best broker, best insurance intermediary, best reinsurance intermediary, best captives manager, and best employee benefits consulting firm by multiple industry sources. Visit aon.com for more information on Aon and aon.com/manchesterunited to learn about Aon’s global partnership with Manchester United.
© Aon plc 2016. All rights reserved.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 profes-sional advice after a thorough examination of the particular situation.
www.aon.com
Risk. Reinsurance. Human Resources.
