Insurance giant acquires cyber-risk specialist

Aon buys Stroz Friedberg in an attempt to increase its cyber offering

Cyber

By Joe Rosengarten

In a deal that was finally announced yesterday, insurance juggernaut Aon PLC agreed to purchase cybersecurity specialist Stroz Friedberg Inc. As awareness around the impacts of cyber exposure continues to increase, Aon hopes the move will enable it to create new cyber offerings and increase its risk management services.

Founded in 2004 by a former FBI agent and a former federal prosecutor who both specialized in computer crime, Stroz Friedberg is New York City-based and has more than 550 employees world-wide. Executives from within Aon said that the acquisition highlights the insurance industry’s increased attempts to respond to clients’ growing fears of a cyber breach or hack.

It’s estimated that property-casualty insurers sold $2 billion to $3 billion of cyber coverage products in 2015, most of which was sold in the US. According to a report released by Marsh & McLennan earlier this year, there are around 50 insurers who currently sell cyber insurance. Cyber purchases increased by 27% in 2015, compared with the year before, which followed on from a 32% increase in 2014.

Explore the pros and cons in working as property-casualty insurer in this article.

A recent study by the Center for Strategic and International Studies, a Washington DC policy research group, and McAfee, puts the annual cost of cybercrime to the world economy at more than $400 billion. Research also shows that every day there are over 500,000 cyber-attacks globally and experts believe that this number will only increase.

Another recent report, titled ‘Global Cyber Executive Briefing: Lessons from the front lines’ by Deloitte highlighted seven different industries that are under particular threat from cyber related crime. The industries include high technology, online media, manufacturing, telecommunications, retail, e-commerce and online payments, and the insurance industry itself.

Speaking specifically to the insurance industry, the report said: “Cyber-attacks in the insurance sector are growing exponentially as insurance companies migrate toward digital channels in an effort to create tighter customer relationships, offer new products and expand their share of customers’ financial portfolios.” The report continued… “As insurers find new and innovative ways to analyze data, they must also find ways to secure the data from cyber-attacks.”

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