All posts by Jeff Dunsavage

I.I.I. Weighs in on Two House Bills That Would Affect Auto Insurance

Triple-I recently was asked to comment on two measures now before the House Committee on Financial Services. H.R. 1756, an amendment to the Fair Credit Reporting Act, would prohibit use of credit information in underwriting or pricing auto insurance.  H.R. 2684  would require the Treasury Department’s Federal Insurance Office (FIO) to annually study personal private auto insurance.  

Our input is summarized below. 

H.R. 1756

The insurance credit score is applied to create a rate appropriate to the customer’s riskiness. These scores help insurers avoid charging high-risk customers too little and low-risk customers too much. Every dollar of discount a person with a low score receives is offset by an extra dollar of surcharge to a person with a high score.  

Introduced in the late 1980s, the scores have been studied numerous times and found to be a powerful predictor of the likelihood a consumer will become involved in an accident. Concerns have been raised that the scores act as a proxy for income – a  variable insurers are banned from using. Recent research finds that this isn’t the case. 

Most recently, in 2019 Triple-I and the Casualty Actuarial Society produced a white paper “Insurance Rating Variables: What They Are And Why They Matter” that explains how actuaries rigorously study variables for their effectiveness and impact on the societal goal of keeping insurance available and affordable. 

H.R. 2684

Under H.R. 2684, it appears FIO would be required to annually gather premiums charged and quoted from insurers that write personal auto coverage, along with rating factors, underwriting guidelines, and any information used to compile them.  

This would be an enormous undertaking. There are more than 250 million private vehicles in the United States – 87 percent of them insured.  But the dataset would be much larger. The proposal also asks for every quote issued to policyholders and other applicants. Each renewal policy gets at least one quote – the renewal at existing terms. Anyone who shops for insurance receives more. 

Once the information is collected, the bill would require the release of each insurer’s data, rating algorithms, and underwriting guidelines to the public – including the insurer’s competitors. This would be like requiring a drug manufacturer to give up all its patents annually. Insurers would have no incentive to innovate to find, for example, variables that do a better job than the current ones because, once discovered, the variables would have to be turned over to competitors.  

COVID-19 Meets Cyberrisk

As COVID-19 spreads, we’ve been hearing more about the importance of hygiene and maintaining “social distance.”

Last night I found out the cyberrisk conference I was scheduled to attend this morning had been changed to a “virtual” meeting. With so many events being canceled or postponed out of an abundance of caution over the spreading COVID-19 virus, it was nice to know the show would go on safely.

I’d already been working from home (thank you, Triple-I!) to avoid exposure during my train commute and potentially becoming a “vector” to family, friends, and co-workers. As I waited for the event to begin, I scrolled through my news feed and spotted several stories about risks related to increased remote work.

Cyberrisk featured prominently in these articles. Unprotected devices, they warned, can lead to data losses, privacy breaches, and ransomware attacks.

One article alluded to campaigns designed specifically to tap into concerns around COVID-19.

“We are already seeing targeted phishing campaigns globally,” said New Zealand Health IT chief executive Scott Arrol. “The cyber virus taking advantage of the biological virus.”

Arrol said hackers seeking to exploit fears of Covid-19 are sending fake ads or links with online viruses.

The message “might look like it has come from the World Health Organization, inviting you to register for more information,” he said. “You click on that link, you’ll be taken to fill out a form and then suddenly…you’re giving away personal information you shouldn’t.”

Technology can help us maintain social distance, but the devices we rely on need to be managed and protected, lest they make us even more vulnerable.

Insurance broker Aon has issued an advisory cautioning employers to take steps to ensure that work-from-home employees can connect to secure remote networks, a Claims Journal article says.

“Any time you’re taking about employees who are not used to working from home, who may not have the correct cybersecurity posture, a virtual private network (VPN) is critically important and having two-factor authentication is critically important,” Aon Senior Vice President Stephanie Snyder said.

A VPN connects remote users or regional offices to a company’s private internal network. Two-factor authentication adds a layer of security beyond a password to make sure a user is authorized to access the system.

Snyder added that telecommuters may be tempted to work from their laptops at a coffee shop – potentially exposing their computers to intrusion. She said employers need to have strict security protocols in place to avoid such exposures.

So, I wasn’t surprised when one of the first speakers at the event I was “attending” mentioned viral epidemics like COVID-19 as something underwriters just a few years ago would not have considered a factor in assessing cyber risk but now should.

As I’ve written before, increasingly interconnected risks require a holistic approach to risk management – one that takes into account preparation, mitigation, and built-in resilience. As COVID-19 has spread beyond its origins in Asia, we’ve been hearing more about the importance of hygiene and of maintaining “social distance.”

Technology can help us maintain social distance, but the devices we rely on need to be managed and protected, lest they make us even more vulnerable.

COVID-19: A Teachable MomentFor Thinking About Risk

As we take our precautions and wait for the World Health Organization (WHO) and the U.S. Centers for Disease Control and Prevention (CDC) to declare COVID-19 a pandemic, now might be a good time to breathe and think about what this outbreak and other perils in the news can teach us about how we think about risk.

COVID-19 has spread far beyond its origins in China. People worldwide have been infected. Many in China and some beyond have died.

In addition to the human toll, concerns exist about disruptions to global supply chains, economic systems, and markets.

Nothing I’m about to say should be read as minimizing these dangers.

Not our first outbreak

But this isn’t the first infectious outbreak we’ve faced, and it won’t be the last. With people and products traveling the world and economies increasingly interconnected, disease transmission and commercial disruption related to it are inevitable.

How we handle them will be predicated upon how we think about risk.

At this writing, there are 60 cases of COVID-19 in the United States – none considered “Serious” or “Critical.” There have been no deaths and six recoveries. Compare these numbers with the 280,000 to 500,000  flu hospitalizations and 16,000 to 41,000 flu deaths this year to date, as reported by the CDC.[i]

Americans aren’t panicking about influenza, and the media aren’t giving the flu nearly as much attention as COVID-19. These facts appear to be related. As we previously reported, research suggests public anxiety about potential causes of death correlates with the amount of media play they receive; and the media often underreport threats that are statistically more substantial than dangers they emphasize.

We’re not panicking because we’re familiar with the flu and know the drill: wash your hands frequently; cough into your sleeve; avoid crowds as much as is reasonable.

Good news! Following this advice also helps slow the spread of COVID-19.

If we’re panicking over COVID-19, it’s due largely to the coverage it’s receiving and the fact that markets are reacting dramatically. Our reactions have little to do with the likelihood of our being infected.

Pedestrian dangers

Until WHO and CDC tell us otherwise, do you know what’s more likely to kill you than the coronavirus?

That’s right: An automobile.

According to a report published this week by the Governors Highway Association (GHA), pedestrian auto fatalities in 2019 were at their highest since 1988.

“During the 10-year period of 2009 to 2018,” the report says, “the number of pedestrian fatalities in the U.S. increased by 53 percent, from 4,109 in 2009 to 6,283 in 2018.”

It estimates 6,590 pedestrian fatalities occurred in 2019, the most in more than 30 years.

Possible reasons include smart phone use by pedestrians and drivers; increasing purchases of light trucks and SUVs relative to passenger cars; even more people walking due to warming temperature trends.

As word of this report spreads, don’t expect people to change their phone, car-buying, or walking habits. We accept these risks because we enjoy the freedom and control that goes with making our own decisions. We roll with them because they feel familiar and manageable.

As a colleague expressed it: “That’s why Jaws didn’t scare me. All I had to do to avoid sharks was to stay out of the ocean. Now, Freddy Krueger was another story….”

If you’d like to be better informed about relative mortality risks, the chart below is a good place to start. The list – which represents only accidental deaths – is by no means exhaustive.  In fact, a different study, based on data from the same year (2017), found accidental deaths were the third-largest mortality category, after heart disease and cancer.

Close behind accidents were respiratory disease and stroke.


Public anxiety over COVID-19 is due more to media coverage and market reactions than likelihood of infection.

[i] Because influenza surveillance does not capture all cases of flu that occur in the U.S., CDC provides these estimated ranges to better reflect the larger burden of influenza. These estimates are calculated based on CDC’s weekly influenza surveillance data and are preliminary.

Triple-I at 60: New World, Same Powerful Mission

Sixty, many say, is the new 40. People living longer and in better health than ever before have opportunities for work, leisure, travel, and self-expression that previous generations could only dream of or regret not having seized.

Insurance has played a critical role in these improved circumstances by absorbing and distributing risks that otherwise would have made many types of investment prohibitively expensive — investment that directly affects everyone’s quality of life. And for the past 60 years, the Insurance Information Institute has supported the property/casualty insurance industry by helping the public understand risks and the products that help mitigate them.

“Property insurance is an integral part of our national economy. It is vital to business enterprise and to the establishment of credit. Nearly every individual American is directly affected by it.”

These words, from a 1959 announcement of the establishment of Triple-I, are as true and relevant now as they were then. But where that announcement referenced “fire, automobile…fidelity and surety, and inland marine insurance,” we would need to mention “cyber, terrorism, business interruption, supply chain, workers compensation, professional and management liability,” along with numerous other products and features that keep emerging to address the changing risk landscape.

The industry’s history of developing forms of coverage to meet businesses’ and individuals’ changing needs is evocatively illustrated in the following, from a 1962 Triple-I ad:

“During the same year that America’s property and casualty insurance companies provided special coverage for the first Telstar communications satellite, they also wrote more than $100,000 in horse and wagon policies. This year will also see a brisk business in false teeth coverage, rain protection, wedding gifts floaters and other unusual forms of insurance.”

As we continue to support the industry by advancing public awareness and understanding, we’re taking advantage of new tools and technologies to do so.  Sixty years ago, print, telephone, and face-to-face communication were the only games in town. Today, we reach broader and more targeted audiences through social media, webinars, blogs, conferences, and more.

A great example is the recent launch of a Risk and Resilience Hub in partnership with Aon and the Colorado State University Department of Atmospheric Science.  The Hub uses data visualization to help people understand natural catastrophe risks and make data-driven decisions when it comes to managing their exposures.

Far from slowing down and feeling creaky at 60, Triple-I is maintaining its strong pace and going where the industry and consumers need us to be.

The 1959 announcement I cited above invited “written or telephone inquiries” from “researchers, editors, writers, educators, students, librarians, civic groups, and the general public.”

Today, you can follow and engage with us on Twitter, Facebook, and LinkedIn. #TripleI60 

A Better Tool to Predict Impact of Hurricanes? 


Minimum sea level pressure can predict the scope of a storm’s  damage — including from storm surge, not just wind — and be more accurately measured in real time.

The more accurately experts can predict an impending storm’s impact, the better prepared individuals, communities, and businesses can be to soften the blow and bounce back. A recent paper published in the Bulletin of the American Meteorological Society suggests an underutilized tool may be better at predicting hurricane damage than the traditionally used “maximum sustained wind speed.”

Atlantic hurricanes have a long history of financial impact. During 2017-18, hurricanes Harvey, Irma, Maria, Florence, and Michael combined to cause more than $345 billion (U.S.) in direct economic damage.  The Saffir-Simpson Hurricane Wind Scale categorizes only the hurricane wind threat – not the totality of impacts, including storm surge and rainfall.

According to the paper,  several scales have been proposed to replace Saffir-Simpson, but most aren’t easily calculated in real time, nor can they be reliably calculated historically. For example, “storm wind radius” datasets extend back only about 30 years. 

Minimum sea level pressure (MSLP), the paper finds, is a better predictor of the scope of a storm’s  damage and can be more accurately measured in real time, “making it an ideal quantity for evaluating a hurricane’s potential damage.”

MSLP is the lowest pressure recorded in a hurricane.  It occurs at the center of the storm and is part of the large-scale structure of a hurricane’s vortex. Because winds are generated by differences in  barometric pressure between the hurricane’s eye and its perimeter, lower pressure is typically associated with stronger winds.  Also, if two hurricanes have the same wind speed, the one with the lower pressure typically will cover a greater area, potentially posing greater storm surge risk.

“With aircraft reconnaissance, MSLP can be reliably calculated,” the paper says. It’s also much easier to measure at landfall than is maximum sustained wind speed.

“Barometers are among the simplest meteorological instruments and will usually operate in a wide range of conditions,” the report says. Anemometers, which measure wind speed, “are prone to mechanical failure…precisely when they matter most.”

The paper was authored by Colorado State University atmospheric scientist Dr. Philip J. Klotzbach — a Triple-I non-resident scholar — along with scientists from the National Oceanic and Atmospheric Administration (NOAA), North Carolina State University, the University Corporation for Atmospheric Research, and insurance broker Aon.


Uncertainty Clouds Business Risks Related to Covid-19 Coronavirus


Supply-chain disruptions due to Covid-19 could affect health care worldwide and lead to health, travel, life, workers comp, business interruption, and other claims. 


The Covid-19 coronavirus death toll has passed 1,300 and will likely continue to climb, with more than 60,000 cases reported worldwide. The loss of life and costs of identifying and caring for the sick are compounded by the following considerations:

China, where the virus originated and remains most prevalent, is the world’s largest producer of active pharmaceutical ingredients. In 2018, Politico reports, citing U.S. Commerce Department data, the country accounted for:

  • 95 percent of ibuprofen imports
  • 91 percent of hydrocortisone imports
  • 70 percent of acetaminophen imports
  • 40-45 percent of penicillin imports, and
  • 40 percent of heparin imports. 

China also is a major supplier of disposable medical devices like syringes and gloves, as well as surgical equipment. Michael Alkire, president of healthcare supply chain consultant Premier, told Modern Healthcare it’s hard to estimate how many of these goods come from China.

“There are critical pieces of upstream supply chain information that are unknown, including raw material suppliers, third party and contract manufacturers, sterilizers and more,” Alkire said. “Because reporting of this information is completely voluntary, most won’t do so until it becomes an industry-wide expectation and best practice.”

Any supply-chain disruptions could affect health care worldwide and lead to liability claims. 

“The good news is that most of the people dealing with China tend to have inventory,” said James Bruno, president of consulting firm Chemical and Pharmaceutical Solutions. “But if this doesn’t straighten out in the next three months, we could have some real problems with supply disruption.”

Health-care facilities and other business can become points of infection. Illnesses contracted in such locations can lead to workers comp claims, as well as claims alleging insufficient care was taken to protect customers and vendors from infection. Health workers who contract the virus on the job would likely be eligible for workers comp benefits, though compensability will be determined by the individual situation, policy wording, and laws of the relevant jurisdictions.

U.S. manufacturers rely on China to supply many industrial components and as a market for their own products. If the virus leads to closures of major ports, businesses in the affected countries could cancel contracts with or default on payments to their foreign counterparties. Contract frustration insurance may cover costs associated with such cancellations, depending on circumstances and the terms of their policies

Auto manufacturing could be an early industry to suffer. China shipped nearly $35 billion of auto parts in 2018, according to United Nations data. About $20 billion of Chinese parts were exported to the United States alone in 2018, according to the Commerce Department’s International Trade Administration. Supply disruptions lasting more than a few months could add momentum to rising auto repair costs.

Event and travel cancellations hurt local and national economies. Concerts and other public events in China have been cancelled over the virus, but its impact on tourism isn’t confined to that country. The contagion emerged right before Lunar New Year – when many Chinese typically travel in China and abroad.

China accounts for more than 10 percent of global tourism, Wolfgang Arlt, founder of the China Outbound Research Institute, said in an interview with National Public Radio. While the most popular destinations for Chinese visitors are in Asia, Arlt said, Paris, Sydney, and New York City also are favorites. That helped make China the biggest international tourism spender in 2018, pumping $277 billion into the travel industry, according to the United Nations World Tourism Organization.

Due to China’s outsized role in global tourism, Covid-19 could affect travel, hospitality, and tourism-dependent businesses around the world. With cruise ships quarantined after the disease was detected, cruise lines may have to deal with longer-term impacts on their businesses, as well as immediate ones related to passenger care and vessel decontamination.

Past outbreaks, such as SARS, Ebola, and Zika, have led many insurers to exclude infectious diseases from coverage in their policies. While specific policies for infectious diseases have been developed, companies reportedly have been slow to purchase them.

Infectious Disease: A Good Reason to Buy Medical Travel Insurance – But Check the Terms

Faced with Covid-19 coronavirus, people – as they tend to during infectious outbreaks – have become concerned about whether and to what extent their insurance will cover costs associated with the event. In the case of travel insurance, there’s good, bad, and ambiguous news.

If you contract coronavirus before you travel or while you’re traveling and have a standard policy that includes coverage for medical treatment and medical evacuation, your care probably will be covered. The “probably” is due to the fact that many insurers set a deadline – a date before which you might be covered but after which you won’t be. That’s because Covid-19 is now a “foreseen circumstance” — people now know about it.

Trip cancellation can be more complicated. Many policies exclude losses caused by disease outbreaks. Cancelling a trip simply because you don’t want to risk infection likely won’t be covered by a standard policy. 

What if you get sick and need to cancel your trip? You might be covered, depending on the insurer and a long list of conditions. For example, an illness that would be covered often requires a medical professional to confirm that the policyholder was, in fact, too sick to travel.

A cancel for any reason (CFAR) policy can help you recoup part  of your expense, but they’re pricey: usually around 10 percent of the cost of your trip, compared with four to six percent for a standard policy.

Do these exclusions and uncertainties mean medical travel insurance is a waste of money?

Not at all.

As I’ve written before, there are many ways one can be injured, fall ill, or die abroad – and your regular medical coverage may not work the same way abroad as it does at home. Since we’re talking about infectious diseases, take a look at the recent snippet below from the CDC website for a glimpse at some areas of concern. The list is always changing.

With travel policies – as with all other forms of insurance – it’s important to understand what’s covered and what isn’t and talk with your agent to be sure you’re getting the coverage you need. You also should thoroughly research your destinations and planned activities for possible exclusions.

JIF Insights: Former U.S. Economic Adviser: “Expansions Don’t Die of Old Age”

 

Jon Hilsenrath, chief economics correspondent for The Wall Street Journal (left), and Glenn Hubbard, past chairman of the U.S. Council of Economic Advisers.

Glenn Hubbard, former chairman of the U.S. Council of Economic Advisers, projected 2 percent U.S. GDP growth for the next year – a bit more optimistic than the 1.8 percent consensus estimate of professional economic forecasters.

The U.S. economic recovery remains in record-setting territory, and though the pace of real GDP growth has slowed – from 3.1 percent in the first quarter of 2019 to 2 percent in the second and 1.9 percent in the third – there are few signs the expansion is fading. According to the Federal Reserve Bank of St. Louis, the current growth rate is consistent with the economy’s potential growth rate, which most economists estimate at between 1.75 percent and 2 percent.

“Expansions don’t die of old age,” Hubbard told attendees at Triple-I’s Joint Industry Forum. “They die of some shock, some policy action that strangles them.”

Asked by Jon Hilsenrath, chief economics correspondent for The Wall Street Journal, whether President Trump’s 3 percent growth target was realistic, Hubbard said it could be achieved, “but it would require some really outsized assumptions.”

“You’d need 2 percent-plus productivity growth,” he said, adding that weak population growth and continued low labor force participation are greater obstacles to reaching such an optimistic target.

Despite technological advances that might be expected to drive productivity, the Organization for Economic Cooperation and Development (OECD) reports, “productivity growth has declined sharply” in recent decades. Low labor force participation is associated with lower GDP and tax revenues, according to the Congressional Budget Office (CBO). It’s also associated with larger federal outlays, because people who aren’t in the labor force are more likely to enroll in federal benefit programs. Labor force participation has been weak since the end of the recession and, despite upticks in 2016 and 2017, the CBO expects it to remain so until 2027.

Slow and steady

“Barring anything unforeseen,” Hubbard said he doesn’t believe a downturn is imminent. He pointed to countries like Australia that have experienced decades-long slow, steady expansions.

“One of the reasons this expansion has gone on for so long,” Hubbard said, “is that it has not been as robust throughout as other expansions.”

He pointed to the “lower for longer” interest rate environment as a risk area for the insurance industry, noting that difficulty earning spread could lead to “pockets of excess risk taking.” While many have warned about this risk,  insurers have shown they can earn profits while maintaining reserve adequacy. As Triple-I recently reported, 2019’s third-quarter $48.1 billion net income after taxes for the property/casualty industry was the second highest since Q3 2007 and only slightly below the highest profit ($49.4 billion), in  Q3 2018.

2020 Elections: Don’t Be ‘Overly Conventional’

On the U.S. elections, Hubbard said “If you’re focused on the economy and economic variables, the President should have a very good chance of being re-elected.”

“I think, though, it’s a mistake to be overly conventional,” he continued.  “That kind of analysis may have led people astray in calling the 2016 race. I look at underlying currents in the economy, and I see a current of many people doing very well, others doing less well – neither side is completely playing to both of those groups.”

Hubbard said he “wouldn’t rule out” a Democratic presidential win, even if the candidate came from the far Left.

“When I ask business leaders about uncertainties they’re worried about, this is number one on their list,” Hubbard said, “because a scenario that delivers a far-Left Democratic President also delivers a Democratic Senate and could mean very different policies.”

JIF Insights: Changingthe ConversationOn Extreme Weather

Extreme Weather panel (L to R): Charles Chamness, National Association of Mutual Insurance Companies; Francis Bouchard, Zurich Insurance Group; Stephen Clarke, ISO; Dr. Daniel Kaniewski, FEMA; Dr. Rick Knabb, The Weather Channel; Kenneth Tolson, Crawford & Company

It was like music to my ears to hear risk and resilience experts at Triple-I’s Joint Industry Forum, in a panel on extreme weather, talk so much about communication.

Moderator Charles Chamness, president and chief executive officer of the National Association of Mutual Insurance Companies (NAMIC), kicked off the session by asking Dr. Rick Knabb – on-air hurricane expert for the Weather Channel (TWC) – about the impact on disaster preparedness of tools like TWC’s “storm surge depth simulator,” which Chamness described as “somewhat terrifying.”

If you haven’t seen it, the simulator uses virtual reality technology to show viewers what different water depths could look like and the kind of damage they could generate (see video below).

“We’ve gotten a lot of feedback,” Knabb replied. “Some people tell us, `Wow, I didn’t know how bad water can be.’  Some people tell us ‘You’re scaring me.’  And on some level, we’re trying to scare people just enough to respond and to prepare.”

Knabb added that he had no data to prove people who watch such simulations take immediate steps to improve their preparedness, “but we’re seeing the conversation change. Social media is one of the best ways I have to see that happening.”

The challenge remains, he said, to overcome “the positive bias” of people saying, “That looks really scary – but I don’t think it will ever happen to me.”

Francis Bouchard, Zurich’s group head of public affairs and sustainability, took the insurance industry to task for talking about risks in language customers don’t necessarily understand.

“We’re all risk elites here,” Bouchard said. “Our vernacular is not what normal people speak. And yet we insist on using our language to describe something that’s totally alien to most of the public.”

FEMA Deputy Administrator for Resilience Dan Kaniewski agreed.

“At FEMA, we no longer speak in these technical terms like `a one in 100-year event’” – a phrase, he said, that “makes a homeowner who’s just purchase their home think they have 99 years before they have to worry.”

Prepare, Mitigate, Insure

“When we at FEMA talk about ‘resilience,’” Kaniewski said, “what do we mean? We mean preparedness. We mean mitigation. We mean insurance.”

Kaniewski cited evidence from FEMA’s annual household surveys indicating that people in disaster-prone states are “more risk aware and better prepared” than elsewhere in the nation.

“But it’s not enough,” he said. “They have to do so much more.”

Beyond physical preparedness, Kaniewski said, “we have to talk to people about being financially prepared. That means having cash on hand. That also means insurance. Insurance is the best resilience tool.”

“Demand flood insurance”

Knabb agreed, calling upon meteorologists around the world to “talk about insurance more.” He also called on insurance agents to discuss flood coverage for their customers who aren’t in flood zones.

“If it can rain where you live,” he said, “it can flood where you live.”

He recounted buying a new home, asking his agent about flood insurance, and being told, “You don’t need it.”

“I told him, ‘Get it for me anyway,’” Knabb said. “And I’ve changed the graphics I use on The Weather Channel – instead of saying, ‘Ask Your Agent If You Need Flood Insurance’ to ‘Demand Flood Insurance.’”

The panel discussion covered a range of topics, including insurers’ need to emphasize risk reduction and resilience  and the “data fluency” of insurance regulators. You can watch the session below.

JIF Insights: Cowbell CEO On Simplifying Cyber For Smaller Firms

At Triple-I’s Joint Industry Forum last week, I had the opportunity to meet with Jack Kudale, CEO and founder of Cowbell Cyber, and learn more about how the startup aims to simplify and demystify cyber insurance for small and medium enterprises.

Cowbell CEO Jack Kudale’s background includes 25 years in enterprise software and five in cyber security. He led three startups before founding Cowbell.

Cyber remains a tough sell among smaller companies. As previously reported by Triple-I, many believe their risk profiles don’t warrant the cost of the coverage, and some complain the policies contain too many exclusions. A 2019 Advisen survey of brokers and underwriters – all involved in cyber insurance – found “not understanding exposures” (73 percent), “not understanding coverage” (63 percent), and “cost” (46 percent) to be the top three obstacles to writing and issuing cyber.

‘We eliminate the application’

Cowbell this morning announced the launch of Cowbell Prime 100 – the company’s A.I.-powered platform that promises to assess customers’ cyber exposures in real time and match them with the most relevant coverage for their business – all in about five minutes.

“Basically, we eliminate the application,” Kudale said. “The coverage is highly individualized for each specific business.“

And, if that isn’t enough, instead of an annual process of underwriting and renewal, Cowbell Prime 100 will continuously monitor customers’ exposures and recommend coverage changes in real time.

“For smaller companies, the concern is about speed and simplicity,” Kudale said. “Do I have to fill out long forms or answer intrusive questions? We remove all that friction and provide coverage tailored to their exposure.”

Larger companies, Kudale said, “are more interested in insights. Our continuous underwriting will help them better understand their cyber risks and how the recommended coverage addresses them.”

“The more customized the policy,” he continued, “the less concern there is about excessive exclusions.”

Cowbell Factors

The platform’s proprietary “Cowbell Factors” assess:

  • Projected loss costs based on hundreds of thousands of cyber cases,
  • Risk signals from internet-exposed infrastructure,
  • The customer’s cyber security practices,
  • “Dark web” intelligence,
  • Industry-specific business-interruption data, and
  • Regulatory compliance data.

Kudale’s background includes 25 years in enterprise software and five in cyber security. He led three startups before founding Cowbell with partners from the insurance and tech worlds.

Cowbell Prime 100 offers an A.M. Best ‘A’-rated admitted policy backed by Boost Insurance and prominent reinsurance partners, including Markel Global Reinsurance Company, Renaissance Re Holdings, and Nephila Capital. The company currently is appointing brokers and agents in California, Colorado, Arizona, Illinois, Oregon and Nevada.