Demand Factors of Cyber Insurance

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Introduction
Business insurance is a concept which protects a business form several losses which occur
in day to day business operations (Serpa, 2016). There are several types of business
insurance such as commercial vehicle insurance, Professional liability insurance, property
insurance, home based business, product liability insurance and vehicle insurance and cyber
insurance (Les, et al., 2011). Companies assess their business
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530Coursework assignment 1 answer template
insurance requirements based on potential risk indulge in the environment in which a
company operates (Secretan, 2018).
AXA is an insurance service provider. The company is the French multinational insurance
company based in the 8th arrondissement of Paris which provides insurance services and
products also other financial services across the globe (AXA, 2018).
AXA's service of cyber insurance is most demandable in the market due to increased
demand for cybersecurity.
This report will analyse the demand factors and the impacts these factors having on the
market share of this product also giving some recommendation to AXA for increasing its
market share.
AXA Business insurance
AXA is one of the biggest companies offering financial insurance to the international market
with headquarter in France. However, AXA is the representation of the group of many
companies but it is organized independently in many different countries as per the country’s
laws and regulations.
The company works under five different business felids: Life and Savings, Property and
Casualty, International Insurance, Asset Management, and Banking. The Life and Savings
fragment offers items including individual and gathering investment funds items, life and
wellbeing items for both individual and business customers. The Property and Casualty
portion offer items including engine, family unit, property and general risk insurance for both
individual and business clients, principally little to medium estimated organizations. The
International Insurance section centres on risks, reinsurance, and help. The Asset
Management fragment incorporates broadened resource the board and related
administrations. The Banking portion includes in the financial exercises, which incorporates
retail banking, contracts credits and reserve funds led principally in France, Belgium, and
Germany.
AXA has built up itself as a key player in the riches the board/insurance area in creating
nations. Today, 52 million customers on the planet trust AXA and the AXA name. Since
1998, the AXA Group has been working together under a solitary brand with worldwide
reach.
AXA is the UK’s biggest start up business insurance provider.
AXA trades in the UK as AXA UK using several subsidies such as AXA sun life, AXA
investment manager, AXA PPP health care AXA Wealth. Company’s market capitalization is
around 64.1 B USD. The company is listed in a Forbes as 65th top regarded company 2018,
and 97th most valuable brand in 2013.
Cyber insurance
In today’s technology world, social media and internet play a key role in the many
transactions o the business and these key aspects serves many kinds of cybercrime and
attacks. Regardless of whether propelled by ordinary programmers, crooks, insiders or even
country states, cyber-attacks are probably going to happen and can make moderate extreme
misfortunes for associations expansive and little. As a part of risk
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530Coursework assignment 1 answer template
management plan cyber insurance is an important product to purchase to secure the
organizations from several cyber-attacks.
Cyber insurance policies, additionally alluded to as cybersecurity insurance or digital
obligation insurance coverage (CLIC), is intended to enable an association to moderate
hazard introduction by counterbalancing costs required with recuperation after a digital
related security rupture or comparative occasion (AON, 2017).
European regulation introduced an act general data protection regulation act on 25 May
2018 (Groot, 2019). These standards basically protect a business from several cybercrimes
such as data security breaches and non-compliance management. AXA launches many
kinds of cyber insurance.
AXA XL Insurance's cybersecurity insurance approach accompanies extended coverage and
considerably more extensive terms to ensure against the present rising dangers. AXA offers
coverage for information insurance risks, both for the outsider cases and first-party
moderation costs following an innovation or digital occasion. Its products capacity is around
15 mn USD. The company cyber insurance includes coverage of several risks:
 Privacy and scrutiny liability
 Data Breach Response and managing crisis
 Privacy regulatory defence costs an coverage
 Data recovery
 Cyber extortion (XL, 2018).
In 2018 AXA also provide new service of cyber insurance policy specifically designed for
small and mid-sized businesses (SMBs).
the on-request, AI-powered digital insurance service grows the backup plan's scope in the
digital insurance market and gives SMBs access to wide digital insurance, also digital
security assets to enable them to ensure their income, gainfulness and client connections.
AXA XL's digital insurance service is designed for organizations under $20 million in yearly
income and offers limits from $250 thousand up to $3 million. Using Slice's E&S business
permit, the advanced stage gives extensive coverage that can without much of a stretch be
bought in only minutes for qualifying SMBs. This straightforward on boarding process
enables clients to effectively obtain an approach as well as submit the first notice of
misfortune through our cases bot (Insurance Journal, 2018).
The policy incorporates coverage for information security and risks Insurance, both for
outsider cases and first-party moderation costs. These are frequently connected with a
digital attack, such costs for notice, credit checking, information recovery, notoriety the
board, loss of business and additional cost. The coverage also gives insurance to digital
blackmail threats and other breach-related liabilities including administrative penalties,
GDPR and Merchant Services Agreements. The AXA XL cybersecurity insurance
arrangement is conveyed with canny information to help SMBs comprehend their digital risks
introduction and figure out how to reinforce their digital defences. Clients have furnished an
individualized dashboard with a general digital hazard evaluation and scores alongside
benchmark scores of their industry peers over each hazard category (XL, 2018).
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530Coursework assignment 1 answer template
Demand Factors of Cyber insurance
In this digital world, digitalization becomes a key aspect for many businesses, without
internet and digitalization it’s impossible to run a business however these involve many
cyber risks and breaches. The impacts of cyber breaches on organizations, governments,
and charities effects millions of customer’s data and security breaches and different kinds of
breaches such as phishing, theft identity, hacking, and many others (EIOPA , 2018). In the
UK in the year 2015, there are 38 firms hit by cyber-attacks and 24 firms in 2016 and around
69 firms hit in 2017. According to National cybersecurity centre, there are around 109 million
incidents of cyber frauds and around 1100 cyber-attacks in last 12 months, and around 590
of these observed as substantial and 30 other which needs necessary action by
governments. Increased cybercrime creates worries for many organizations and
governments also (Thomas, 2018). These risks create many kinds of losses for
organizations whether they are large or small, and these risks created demand for cyber
insurance. Cyber insurance is playing and key role in helping all the organizations and build
resilience. Here are several factors which drive the demand for cyber insurance.
• High cybercrime rate
• GDPR Act
• Digital payments and connectivity
• IT security and risk management
High cyber-crime rate
In the UK Cybercrime reached 63% (Ashford, 2018). Precisely 1,769, 185,063 client records
were leaked in all over the world (Mason, 2019). In 2017 the insurance world substantial
threat of ransomware software in the form of Peaty, not Peta ad malware attacks that
messed the computer system over 150 countries and other operations of numerous
industries includes hospitals, universities and shipping companies, and governments.
Although no one can ever measure the exact losses associated with these incidents.
NotPetya attacks stances at around 10bn, and WannaCry at 4bn $ and some estimates
have the Petty attack costing around 10times that of WannaCry (Gittle, 2019).
This increased cybercrime creates worries for cybersecurity, as a result, these worries
creates plenty of opportunities for AXA and many other companies.
GDPR Act and regulatory environment
The increment of cyber-attacks lead crates the worries of governments. The General Data
Protection Regulation is a European law on data privacy and security for all the organization
to protect their customer’s personal data. This becomes effective on 25 May 2018. All the
organizations across the globe required to compliant with the law and must protect the data
of all the EU citizens (Groot, 2019). Cyber insurance decreases the risk exposure to cyber
threats such as coverage of third-party liability, financial losses.
Digital payments and connectivity
Cybersecurity is one of the big challenges faced by stakeholders of the digital payment
ecosystem. With more and more users preferring digital payments, the chances of getting
exposed to cybersecurity risks such as online fraud, information theft, and malware or virus
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