Tracie Grella

Global Cyber Practice Leader

+1 212 458 1875 Cyber Today Tracie.Grella@aig.com

Outlook, Underwriting Challenges and Recommendations

Thursday, August 17, 2017
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Ever Growing

Continued 

global growth 

driven by:

a) High profile 

cyber events

b) Increasingly 

destructive

attacks

c) Regulatory

landscape

Diverse Buyers

Increasingly 

attractive to 

nontraditional 

buyers with 

different 

needs.

Diverse 

buyers lead to 

rapidly 

evolving 

cyber 

coverages

In Transition

At high level, 

companies 

claim:

a) approach 

cyber 

conservatively and 

b) recognize 

need to 

manage 

systemic risk 

potential

On front line, 

we are seeing 

different

actions.

Physical Loss

The market for 

cyber physical 

losses is 

developing.

2

The cyber security market is rapidly evolving to meet the commercial sector’s growing dependence on information 

networks to conduct business

Market Trends

Insurance: 

opportunity to 

proactively manage 

risk and improve 

client risk profiles

Broker: 

Trying to streamline 

process

Technology Firms: 

desire to partner 

and support 

insurance 

marketplace

Regulatory 

Bodies: becoming 

more active

Agent Trends

Outlook

Source: American International Group (AIG), Inc. Analysis
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Underwriting Challenges

Underwriting challenges are evolving as the nature of cyber risk expands. High quality data, risk management and partners 

are essential to ensure the insurance industry’s ability to meet cyber security risks. 

Source: American International Group (AIG), Inc. Analysis 3

Data Quality

Quality data is crucial to the sustainability of 

expansive cyber insurance

 Data required to properly differentiate risk is 

extensive

 There is a lack of visibility on supply chain, 

which makes risk analysis more difficult

Risk Management

Aggregation risk and coverage expansion require 

dedicated, data-equipped risk management

 Managing systemic cyber risk across all 

coverage lines

 Management of resources and expertise as 

non-physical cyber coverage expands into 

traditional physical loss based policies

 Identification, evaluation and modeling of the 

nodes of aggregation

Partners

Coverage comparability and education are 

essential to healthy competition

 As more carriers enter the market, coverage 

comparison becomes more challenging for 

brokers

– Brokers are responding with broker forms 

and a desire to streamline the process

 There is a significant education gap as more 

brokers, clients and underwriters enter the 

cyber insurance market, 
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Education

• Scenario Planning Workshops – AIG prepared to facilitate across industries

• Cybersecurity Education – more training of cybersecurity professionals and research funding

• Public Service Campaign – raise awareness of cyber hygiene and distribute recommendations

Risk 

Management

• Geopolitical Risk Management – Federal agencies take lead on geopolitical cyber protection

• Software and Hardware Security Standards – create independent organization seconded to

developing cyber security standards and certifying devices

Incentives

• Tax Incentives for Cybersecurity Investment – to help companies invest in cyber security

• Government Intelligence Sharing – enhance Information and Security Analysis Centers (ISAC)

• Legal and Regulatory Immunity – to promote cyber security innovation and technology

4

Recommendations

Proper education, risk management and cyber security incentives can lay the foundation for national cyber security as the 

threat landscape continues to grow and evolve.
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Q&A

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