Google is teaming up with two global insurers to cover cyber breaches and related risks for businesses that use its cloud services, the first time a major provider has opened up such insurance to its clients, the companies said on Tuesday.
Major insurers have been treading carefully on cyber risks for years, but the tie-up between Google, Allianz and Munich Re gives the insurers special access to data to see what controls are in place at client firms to help them price the risk.
“This is extremely key. This is data that we as insurance carriers traditionally have not had access to,” said Thomas Kang, head of North American cyber, tech and media at Allianz’s AGCS unit.
Munich Re and Allianz on Google Cloud Project
Google Cloud enables organisations to retrieve an individualised report on their security position on the platform using their new Risk Manager tool. Munich Re and AGCS have developed the Cloud Protection + policy exclusively for Google Cloud customers. The enhanced data from the Risk Manager tool facilitates a differentiated risk.
The policy will initially be offered to Google Cloud customers in the U.S. with revenues of between US$ 500m and US$ 5bn. At a later stage, the offer will be extended to users in other revenue segments and countries.
Gartner Research says that by by 2024, more than 45% of IT spending will shift from traditional solutions to the cloud.
“It is optimal for industry peers to establish custom products that move the needle in today’s corporate environment,” said Jody Yee, managing director for Alternative Risk Transfer, AGCS.
“Above and beyond the immediate benefit for Google Cloud customers, the cooperation will contribute to the further enhancement of Munich Re’s cyber risk modelling,” said Stefan Golling, member of the Munich Re board of management.
The Allianz Trends in Cyber Risk report notes that business interruption is the main cost driver behind cyber claims; it accounts for nearly 60% of the value of all claims.
The initial targeted customers are U.S.-based companies with annual revenue of between $500 million and $5 billion.
“We didn’t want to overreach coming out of the box. But the plan is obviously to expand this offering both up and down the revenue scale very shortly,” said Bob Parisi, head of cyber solutions in North America for Munich Re.
The insurers, both headquartered in Munich, will cover up to $50 million in potential losses.
The data provided by the customers means the insurers will stretch coverage of lost revenue for up to a full year, from a maximum of six months previously.
(Reporting by Tom Sims; Editing by Jan Harvey)
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