Cyber insurance company founded by Marsh within captive structure
Edgware Re: Marsh's Innovative Solution for Cyber Insurance
In the ever-evolving landscape of cybersecurity, there's a growing interest among corporate stakeholders to better manage their cyber risks. One company leading this charge is Edgware Re, a group captive insurance company launched by Marsh specifically for cyber insurance solutions.
Edgware Re's primary role is to pool cyber insurance risks from participating companies, allowing for risk sharing and improved coverage capacity compared to traditional insurance markets. This approach helps enterprises better control their cyber insurance program and align incentives for risk management improvements.
By offering tailored, flexible cyber risk coverage, Edgware Re caters to the specific needs of its group members, who often face similar cyber risk exposures. Leveraging Marsh’s expertise and risk management capabilities, members can mitigate cyber risks while accessing insurance at potentially lower costs due to risk sharing and captive structure efficiencies.
The creation of Edgware Re is an example of market maturation, according to Timothy Marlin, senior vice president in Marsh's U.S. and Canada cyber practice. Between 2020 and 2022, there was an uptick in the transfer of cyber risk to captives due to hard cyber pricing. This trend reflects corporate stakeholders' increasing need for more strategic risk financing options, as they've faced years of pricing volatility and coverage modifications by insurers.
The new company, based in Bermuda, aims to provide greater stability, control, and contract certainty in the cyber insurance market. Edgware Re allows participating members to buy up to $10 million in insurance or reinsurance coverage.
Notably, the cyber insurance market is maturing to address a dynamic threat environment and evolving risk management needs of insureds. The settlement in the NotPetya case is a closely watched event in the cyber insurance industry, with pharmaceutical giant Merck reaching a settlement with insurers in January 2024.
As the role of Chief Information Security Officers (CISOs) evolves, they may provide more detailed risk assessments to corporate stakeholders, helping them understand the risk calculus of their technology stacks and address the question: Are we a target?
In a softening pricing environment, insurers remain tight in terms of underwriting standards. Captives, either formed by insurers or corporations, could be a strategic use of risk transfer, better pooling, and using economies of scale for risk management and reinsurance purposes.
For the latest or more detailed information about Edgware Re’s current activities or offerings, it's recommended to consult direct Marsh communications or recent insurance industry reports. Edgware Re's group captive approach highlights the growing importance of risk management and reinsurance in the cyber insurance market, offering a promising solution for businesses seeking to navigate the complexities of cyber risk management.
- As the cyber insurance market matures to meet a dynamic threat environment, businesses can utilize solutions like Edgware Re, a group captive insurance company launched by Marsh, for better risk management, particularly concerning cyber risks.
- Edgware Re's offering of tailored, flexible cyber risk coverage aligns with the specific needs of its group members, allowing them to mitigate cyber risks while potentially benefiting from risk sharing and captive structure efficiencies, which can lead to lower costs.
- In a softening pricing environment, insurance companies continue to uphold stringent underwriting standards. This emphasizes the strategic importance of captives, such as Edgware Re, as a means to pool risks, better manage cybersecurity, and attain contract certainty in the cyber insurance market.
