Allianz Global Corporate & Specialty (AGCS), the corporate insurer of Allianz SE, and Munich Re have jointly developed a new commercial cyber risk insurance solution called “Cloud Protection +.”
This collaboration provides state-of the-art insurance exclusively designed for customers of Google Cloud enrolled in Google’s new “Risk Protection Program.
The Risk Protection Program consists of two components: Risk Manager, a new tool that helps determine a customer’s security risk posture on the cloud, and Cloud Protection Plus + – a new cyber insurance solution built exclusively for Google Cloud customers.
Under Cloud Protection +, clients are offered, subject to underwriting eligibility, a new type of protection against cyber incidents within their own corporate environment as well as incidents related to Google Cloud. Target customers for this solution are US-based Google Cloud users, though this offering may be offered globally at a later date.
Companies are increasingly using cloud-based solutions: according to Gartner Research, by 2024, more than 45 percent of IT spending will shift from traditional solutions to the cloud. Cloud usage comes with many benefits, such as lowered cost, enhanced data analytics and expanded collaboration, but also new potential risk around security, compliance and data privacy.
“As one of the top three global business risks in the Allianz Risk Barometer 2021, cyber risk is complex and ever-changing, and cloud exposures are among today’s most relevant threats,” stated Thomas Kang, North American Head of Cyber, AGCS.
To address a developing market need with Munich Re along with a major cloud platform provider such as Google Cloud is ideal. We not only obtain valuable insights on a company’s security posture, but remain at the forefront of understanding and managing emerging risks associated with cloud architecture and latest client needs.”
The new product allows both carriers to utilize Google Cloud’s proprietary assessment tools to harness stronger underwriting variables, yielding a more data-driven risk evaluation and underwriting process. Each carrier will use the data from Google Cloud’s Risk Manager reports to simplify the insurance application and risk assessment. Conveniently, carriers receive reports directly from the clients through the Risk Manager tool.
“It is optimal for industry peers to establish custom products that move the needle in today’s corporate environment,” added Jody Yee, Managing Director for Alternative Risk Transfer, AGCS. “We are meeting latest coverage needs with viable solutions to meet changing business dynamics.”
Cloud customers, especially those in regulated markets such as financial services and healthcare, are concerned about security and reliability in the cloud as they run the risk of high-profile data breaches and outages. Some have resulted in great financial and reputational loss or even business closures. Whether it stems from an external cyber-attack, human error or a technical failure, the Allianz Trend in Cyber Risk report further points out that business interruption (BI) due to security issues, is the main cost driver behind cyber claims; it accounts for nearly 60% of the value of all claims analyzed, with the costs associated with data breaches ranking second.
AGCS launched its first standalone cyber insurance product in 2013, and has seen steady growth since in all key markets, globally. As the demand for cyber coverage has evolved, Allianz launched its Cyber Center of Competence in 2018. The center, embedded into AGCS, focusses on coordination and alignment of cyber underwriting for the commercial insurance segment within Allianz Group, adopting a prudent approach as both cyber risks and claims are increasing.
Recent priorities include the development of a new underwriting approach to clarify exposures – particularly silent cyber – across commercial property and casualty policies. Product governance and harmonization as well as the further expansion of the global service provider network for cyber policyholders are also key areas under review.
