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Cyber Insurance Underwriting Process

Federal Advisory Committee on 

Insurance

John Coletti

Chief Underwriting Officer

Cyber and Technology

August 17, 2017

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The implications of nation-state cyber attacks 

on the cyber insurance market are deep and far 

reaching.

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Threat Actors

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30%

13%

11%

25%

21%

Cyber Criminals

Nation State

Hacktivists

Hackers

Rogue Employees
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Who are the Cyber Threat Actors

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Actor Motivation Impact

Nation State • Economic, political, and/or 

military

• Loss of trade secrets

• Loss of command & control capability

• Prolonged foothold in one’s network for future attacks (APTs)

• Disruption of business activities/asset loss

• Influence elections and policymaking

Organized Crime • Financial gain

• Collect information for future 

financial gain

• Regulatory inquiry/penalty

• Consumer and shareholder lawsuits

• Brand and reputational damage

• Consumer confidence loss

Hacktivists • Political or social change

• Pressure business to alter a 

business practice

• Create fear and uncertainty

• Disruption of business activities and loss of assets

• Brand and reputational damage

• Consumer confidence loss

Insiders • Personal advantage,

monetary gain

• Sabotage for personal 

grievances

• Bribery or coercion

• Disclosure of trade secrets

• Disruption of business activities and loss of assets

• Brand and reputational damage

• Consumer confidence loss
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Cyber Underwriting Process

State Actors

Profile of Nation-State Actor

• Operate without a fear of being apprehended

• Unlimited financial resources

• Utilize sophisticated attack techniques

• Insight into intelligence

• Backed by military and government 

• Motivated by nationalism

• Difficult to apprehend

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Cyber Insurance Coverage

Coverage Available

• Loss of 3rd party trade secrets

• Loss of business income

• Extra Expense

• Data restoration costs

• Regulatory investigations

• Fines and penalties

• Consumer and class actions 

lawsuits

• Defense costs and indemnity

• Costs of a forensic 

investigation

Coverage Unavailable

• Loss of 1st party trade 

secrets

• Brand and reputational 

loss (limited availability)

• Loss of consumer 

confidence

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So Are Nation State Attacks Covered

• Most insurers exclude war but cover 

cyberterrorism

• Many exclude acts of foreign enemies and 

government actors

• Difficulties tracking the source of cyber attacks 

(attribution)

• Lack of case law presents courts with a matter of 

first impression 

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About XL Catlin

• XL Catlin is the global brand used by XL Group Ltd’s insurance and reinsurance 

companies which provide property, casualty, professional and specialty products to 

industrial, commercial and professional firms, insurance companies and other 

enterprises throughout the world. To learn more, visit xlcatlin.com.

• The XL Catlin insurance companies offer property, casualty, professional, financial 

lines and specialty insurance products globally. Businesses that are moving the world 

forward choose XL Catlin as their partner. To learn more, visit xlcatlin.com.

• The XL Catlin reinsurance companies are among the world’s leading reinsurers. They 

offer products that include aerospace, property, casualty, marine and specialty. The 

world’s top insurers choose XL Catlin to help move their businesses forward. To learn 

more, visit xlcatlin.com.

• We are the organization clients look to for answers to their most complex risks and to 

help move their world forward. To learn more, visit xlcatlin.com.

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Legal Disclaimer 

US

• In the US, the insurance companies of XL Group Ltd are: Catlin Indemnity Company, Catlin 

Insurance Company, Inc., Catlin Specialty Insurance Company, Greenwich Insurance Company, 

Indian Harbor Insurance Company, XL Insurance America, Inc., XL Insurance Company of New 

York, Inc., and XL Specialty Insurance Company. Not all of the insurers do business in all 

jurisdictions nor is coverage available in all jurisdictions. 

• The information contained herein is intended for informational purposes only. Insurance coverage in 

any particular case will depend upon the type of policy in effect, the terms, conditions and 

exclusions in any such policy, and the facts of each unique situation. No representation is made 

that any specific insurance coverage would apply in the circumstances outlined herein. Please refer 

to the individual policy forms for specific coverage details. 

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