Risk Insider: Martin Eveleigh

Cyber Risk Insurance: An Ever-Evolving Coverage

By: | March 28, 2017 • 3 min read
Martin Eveleigh is Chairman of Atlas Insurance Management, which he formed in 2002. He specializes in designing alternative risk transfer programs – particularly risk pools – and captive structures. He can be reached at [email protected]

The evolving category of cyber risk insurance continues to receive increased awareness each year, as more and more security breaches continue to surface. Across all industries, the number of cyber attacks, and the costs associated with them, are increasing.

First, the bad news.

The 2015 Verizon Data Breach Investigations Report identifies the top three industries affected by data breaches as Public, Information and Financial Services; while the 2015 Ponemon Institute Research Report indicates that Health, Education and Pharmaceuticals are the most costly per capita. The overriding message from both reports is that no company is immune to cyber attacks.

There were 79,790 known security incidents globally in 2014 with 2,122 confirmed breaches producing loss. The reports also show a 23 percent increase in the total cost of breaches since 2013 and a 12 percent increase in the per capita cost.

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The Ponemon Report identifies three main reasons contributing to higher costs of data breaches in 2015:

  1. Cyber attacks are more frequent and costly.
  2. Data breach costs are impacted by lost business.
  3. Costs associated with detection of data breaches are increasing.

With risk increasing, it is no longer a question of whether a business will be subject to some level of cyber attack, but when and how. Knowing this, what can businesses do to mitigate the risk and damage?

Professional cyber security consultants agree preparation is key. In addition to developing a compliance work plan, companies should identify unpatched vulnerabilities in software and install test patches regularly. Also, certain industries are now mandating specific regulatory compliance criteria be met, and the insurance industry is taking note.

Creating a More Sound Cyber Risk Policy

Despite the best efforts at prevention, however, the risk of cyber attacks and breaches is great. A company can spend thousands, if not millions, on a security system and firewalls; but one employee opening a phishing email can compromise all defenses and allow criminals inside your system undetected, which is why a robust cyber insurance policy is critical to a company being properly protected.

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Unlike other coverage forms, there is no established standard cyber insurance form utilized by carriers in the standard commercial insurance market. To be protected, businesses need to know whether coverage is provided, and at what level, for:

  • regulatory actions
  • incident response costs
  • credit and identity monitoring
  • transmission of viruses
  • business interruption and extra expenses
  • extortion expenses
  • data loss and restoration

A careful review of coverage is critical because a particular coverage that may be most important to your business could be excluded or limited in scope or amount. A captive is an excellent vehicle for providing coverage for cyber risks, as it has the flexibility to tailor coverage to the specific needs of your business.

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Cyber risk is certainly here and rapidly increasing, but you can reduce its risk to your business with the right combination of security and proper insurance. And for insuring cyber risk, a captive just may be your best solution.

More from Risk & Insurance

More from Risk & Insurance

Risk Management

The Profession

Wawa’s Director of Risk Management knows that harnessing data and analytics will be key to surviving the rapid pace of change that heralds new risk exposures.
By: | July 27, 2017 • 5 min read

R&I: What was your first job?

My first job was at the age of 15 as a cashier at a bakery. My first professional job was at Amtrak in the finance department. I worked there while I was in college.

R&I: How did you come to work in risk management?

A position opened up in risk management at Wawa and I saw it as an opportunity to broaden my skills and have the ability to work across many departments at Wawa to better learn about the business.

R&I: What is the risk management community doing right?

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The advancements in analytics are a success for the industry and offer opportunities for the future. I also find value in the industry focus on emerging and specialty risks. There is more alignment with experts in different industries related to emerging and specialty risks to provide support and services to the insurance industry. As a result, the insurance industry can now look at risk mitigation more holistically and not just related to traditional risk transfer.

R&I: What could the risk management community be doing a better job of?

Developing the talent to grow with the industry in specialization and analytics, but to also carry on the personal connections and relationship building that is a large part of this industry.

Nancy Wilson, director, quality assurance, risk management and safety, Wawa Inc.

R&I: What was the best location and year for the RIMS conference and why?

I have had successes at all of the RIMS events I have attended. It is a great opportunity to spend time with our broker, carriers and other colleagues.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

I think the biggest challenge facing most companies today is related to brand or reputational risk. With the ever-changing landscape of technology, globalization and social media, the risk exposure to an organization’s brand or reputation continues to grow.

R&I: What emerging commercial risk most concerns you?

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The changing consumer demands and new entrants into an industry are concerning. This is not necessarily something new but the frequency and speed to which it happens today does seem to be different. I think that is only going to continue. Companies need to be prepared to evolve with the times, and for me that means new risk exposures that we need to be prepared to mitigate.

R&I: Are you optimistic about the U.S. economy or pessimistic and why?

I try to be optimistic about most things. I think the economy ebbs and flows for many reasons and it is important to always keep an eye out for signs of change.

R&I: What have you accomplished that you are proudest of?

I am fortunate to have opportunities professionally that make me proud, but I have to answer this one personally. I have two children ages 12 and 9 and I am so proud of the people that they are today. They both are hardworking, fun and kind. Nothing gives me a better feeling than seeing them be successful. I look forward to more of that.

R&I: What is your favorite book or movie?

This is really hard as there are too many favorites. I do prefer books to movies, especially if there is a movie based on a book. I find the movie is never as good. I have multiple books going at once and usually bounce back and forth between fiction and non-fiction.

R&I: What’s the best restaurant you’ve ever eaten at?

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I have eaten at a lot of different restaurants in many major cities but I would have to pick Horn O’ Plenty in Bedford, PA. It is a farm to table restaurant in the middle of the state. The food is always fresh and tastes amazing and they make me feel like I am at home when I am there. My family and I eat there often during our trips out that way.

R&I: What is your favorite drink?

I do love a good cup of coffee (working at Wawa helps that). I also enjoy a good glass of wine (red preferably) on occasion.

R&I: What is the most unusual/interesting place you have ever visited?

Vacations aside, I do get an opportunity to travel for work and visit our food suppliers. The opportunities I have had to visit back to the farm level have been a very interesting learning experience. If it wasn’t for my role, I would have never been able to experience that.

R&I: What is the riskiest activity you ever engaged in?

My husband, kids and I recently did a boot-camp-type obstacle course up in the trees 24 feet in the air. Although I had a harness and helmet on, I really put my fear of heights to the test. At the end of the two hours, I did get the hang of it but am not sure I would do it again.

R&I: If the world has a modern hero, who is it and why?

The first people that come to mind are those who are serving our country and willing to sacrifice their own lives for our freedom.

R&I: What about this work do you find the most fulfilling or rewarding?

Every day is different and I have the opportunity to be involved in a lot of different work across the company.

R&I: What do your friends and family think you do?

My husband and children have a pretty good sense of what I do, but the rest of my family has no idea. They just know I work for Wawa and sometimes travel.




Katie Siegel is an associate editor at Risk & Insurance®. She can be reached at [email protected]