GK General introduces cyber insurance product as threats grow
GK General Insurance, GKI, has partnered with London-based company Tokio Marine Kiln and global reinsurance advisers Willis Tower Watson to bring a cyber insurance product to market.
The product, called Cyber Control, which becomes available on July 1, allows for the coverage of individuals and commercial entities with revenue below US$10 million.
Coverage, however, is offered as add-ons to existing policies that clients hold with GKI or with insurance companies that the GraceKennedy subsidiary intends to partner with.
“For the individual coverage, the person would have to have homeowners insurance with GKI; but for the commercial product, we are working with some brokers to provide their customers with coverage even though they may not have a policy with us,” GKI Risk and Innovation Manager Jordon Tait told the Financial Gleaner.
The insurance policy, which has standard limits of US$25,000 and US$50,000, is backed by Lloyd’s of London, a British insurance marketplace where members join hands as syndicates to insure and spread risks of different businesses, organisations and individuals. Tikio Marine Kiln offers specialist insurance globally, and reinsurance adviser Willis Tower Watson has a history of 180 years in business.
At a cap of US$25,000, individual coverage under Cyber Control provides insurance against cyberattacks; ransom demands from cybercriminals identify theft and cybercrimes, including phishing scams and credit card fraud. The premiums start at US$65 per year.
For commercial clients, Cyber Control will provide coverage for interruptions from security breaches; digital asset destructions; costs to manage data breaches, including IT forensic costs, fines and penalties resulting from security breaches and credit card fraud; damage and defence expenses from a legal suit associated with security breaches and infringement of offline/online media expenses, that is, liability and defence costs related to copying offline digital content, for example, the swapping of optical discs – DVDs and CDs – and online file-sharing and downloads.
Commercial premiums start at US$150 per year.
GKI anticipates that majority of its business will come from commercial entities and is keen on providing cyber risk solutions to lawyers, doctors, advertising agencies, accounting firms, retailers, manufacturers, schools and real estate agencies. The company is also looking to partner with IT firms such as tTech Limited to provide third-party clients with additional protection against cyber risks.
For coverage of more than US$50,000, the company or organisation may be required to supply additional information to GKI for it to assess the risk, Tait said.
“Currently, we don’t have a product for financial institutions, newspaper businesses or business process outsourcing firms. Because of the nature of those businesses, we would have to enter into discussions with those companies and design tailor-made solutions for them,” he told the Financial Gleaner.
GKI’s launch of Cyber Control comes a year after Key Insurance launched its cyber liability product. GKI says its product is more simplified. The company is also entering the market at a time of heightened concern about cybercrime and alerts from Jamaica’s largest bank about persistent phishing schemes that are growing more sophisticated.
GKI touts Cyber Control as a “game changer that provides peace of mind in an age and time where cyberattacks are no longer an anomaly but, instead, the norm”.
Over the past three years, Jamaica has reported losses of $100 million to cyber schemes.
“The risk of cyberattacks continues to grow; however, many individuals and companies are not adequately equipped to respond to an attack even though there are cyber insurance products available in the market. As such, GK Insurance saw the need to tailor a solution that was simple, easily accessible and affordable to help customers control cyber risks,” Tait said.
Globally, cyber risk now ranks as one of the top enterprise-wide risks facing organisations, with related expenses that are projected to climb to US$20 billion by 2021.
Caribbean Broking Director of Willis Tower Watson, Mark Ferguson, said that, globally, 40 per cent of midsize businesses experience at least eight hours of system downtime, due to a severe security breach in 2018. He added that in 2017, some 554 million personal records were violated, with 69 per cent of related claims caused by employees.
“Risk managers are looking at cyberattacks as a key part of their jobs now. The hackers are so focused on getting data that they now have conferences in San Francisco,” said Ferguson.
“They’ve made a decision that they will attack for a ransom. They say, if we get away with it, great, but if we get caught, what are we looking at – maybe two or three years of imprisonment. That’s the mindset of the people that we are dealing with,” he said.
GKI did not disclose its revenue target for the cyber product, but noted that cybercrime is large enough a problem to generate business for itself and Key Insurance.
Additionally, GKI is already preparing to sell the product in the region through its branches in various countries.
“We want to start with our home market, but then we will extend the coverage to all territories that we are operating in. Regional is our ambition,” Tait said.
GK General has business in St Lucia, Turks & Caicos Island, Dominica, St Vincent & the Grenadines, and Antigua & Barbuda.