Staying ahead of threat actors who are constantly finding new malicious uses of AI can seem a bit like “whack-a-mole” for both insurers and their insureds, according to Canopius US Head of Cyber & Technology, Laura Burke. Laura recently sat down with James Thaler of The Insurer at NetDilligence to discuss how Canopius is approaching AI liability, as well as the cyber claims trends on everyone’s mind.
Here are three key takeaways from their discussion:
For now, AI liability should be treated as an extension of existing technology coverage.
The question of how to cover AI liability is a hot topic in the industry right now, as threat actors and organizations alike embrace the technology. Organizations face exposure from both sides: internally as they adopt AI internally to improve efficiencies, and externally from cyber criminals who are finding creative ways to use it maliciously. With many in the industry likening AI to silent cyber – the unintentional coverage of cyber risks under traditional policies because of ambiguous wording – the question carriers are grappling with is should AI be its own stand-alone coverage, or simply an extension of existing technology coverage.
For now, Canopius is treating AI as an extension of its existing technology coverage. In Laura’s view, AI exposure fits in well with the technology coverage already in place, allowing these risks to be underwritten under existing policies. However, this approach may evolve as the team continues to evaluate how to best underwrite for each insured based on their unique uses of the technology.
Reducing forensic accounting friction and product innovation are needed to shorten the timeline of business interruption claims.
The industry continues to struggle with how to best tackle business interruption risk and shorten the duration of claims. Having carriers and insureds aligned with the same forensic accountant is a tactic Laura and her team are pursuing to significantly streamline the claims process. Canopius is also exploring the use of average daily value products where the business interruption loss per day is determined in advance. Laura points out that these innovations drive alignment among all stakeholders, which is particularly important on complex risks with multi-carrier towers.
Offering proactive risk management services and streamlined claims is a way to differentiate in a soft cyber market.
In an extremely competitive cyber market, having good controls is a must, but differentiating is harder. According to Laura, Canopius’ broad appetite and full risk management offering informed by in-house threat intelligence and analytics means we’re on the forefront of emerging risks. And, the company’s in-house global incident response and personalized claims management ensure we provide the best support possible when incidents occur. In Laura’s view, it’s this full-service offering and streamlined approach that helps Canopius stand out, even in a soft cyber market.
