JLT launches ‘all-risk’ intangible protection insurance

JLT has launched its Intangible Protection Insurance (iPI) product offering the world’s only “all-risk” approach to cyber insurance, according to JLT Speciality partner and communications, technology and media practice chief executive Peter Hacker.

Speaking to StrategicRISK, Hacker said: “iPI is a holistic, all-risk excess of loss approach, which combines contractual liabilities, professional indemnity, intellectual property and cyber risks with first- and third-party included and you can tailor it to the specific industry you are targeting.”

iPI aims to fill the gaps exposed in JLT’s Intangible Cyber Exposure Services which provides qualitative and quantitative analysis of the risk landscape both pre and post-loss.

The all-risk approach offers an alternative to the traditional cyber policies that use named-peril approaches and can often leave exclusions undefined. The product allows for bespoke policies tailored to the specific risk landscape of the client’s industry, which Hacker believes gives it a unique position in the marketplace and describes it as “the cherry on the cake” regarding JLT’s intangible asset products.

Hacker said: “This approach is very important because telecoms have totally different cyber risks to a brewery. The main concerns for a brewery is that the beer arrives on time for the party so it is non-physical damage business interruption (BI) that it is primarily concerned about – not necessarily the data breach and the consequential loss out of the data breach.

“If you take a bank or a telecomm, their main concern is a combination of non-physical damage BI because if they can’t service their customers they are losing revenues and they are losing customers. By the same token, they have some material consequential losses out of the customer base of fines and penalties from the government.”

Hacker says the development of iPI stemmed from analysing aspects of intangible risks that include intellectual property, professional indemnity, contractual liabilities and cyber risks.

He said: “We came to the conclusion that rather than only try to advise and sell a standalone cyber policy, we have to take into account the enterprise wide risk landscape and how risks are interconnected to each other first.”

He added: “When you make a decision today to use cloud computing, you are automatically using more apps so you are outsourcing more, your dependency towards third-party increase. Ultimately, when you use more apps you are going more mobile and you might be more exposed by malware.

“The key problem is that everything is connected to everything else so more cloud means more apps, more social engineering, more mobile, more malware and the result out of this is the decision you make will have an impact on everything else.”

The product was launched in the UK on 16 October and is currently being rolled out across the globe in Europe, Asia and South America followed by the US.