Link to Lloyd's Newsletter

Link to Lloyd's Newsletter
November 2011

Folllow ALB on Twitter @linktolloyds Photos from the ALB Golf Outing in September In this issue Ryan Specialty Group, LLC and RT Specialty, LLC - new ALB members Andrew Stolfi ppointed Acting Director of the Illinois Department of Insurance Cyber Liability and Data Breach Insurance Claims Lloyd's has a wealth of online resources!

Ryan Specialty Group, LLC and RT Specialty, LLC – new ALB members Ryan Specialty Group (RSG) is a global organization consisting of wholesale broking, underwriting managers, a Lloyd’s presence through Jubilee, and other specialty insurance services for agents, brokers and insurance carriers. Headquartered in Chicago, Illinois, RSG was founded by Mr. Patrick G. Ryan, a highly regarded insurance veteran, who saw the need for a specialty organization devoted exclusively to creating sophisticated insurance and risk management solutions for a select group of hard-to-place risks. The wholesale broker, RT Specialty (RT), focuses on tough, high-hazard property, casualty, transportation and professional liability risks. RT offers exclusive proprietary products including catastrophic windstorm, earthquake and flood coverage for residential US construction; life sciences and a dedicated nutraceuticals department; primary and excess transportation; professional and management liability; product liability; allied healthcare; and real estate/OL&T. In addition, under the RSG umbrella are ten managing general underwriters, including Jubilee, an integrated specialist Lloyd’s insurer, offering specialty coverage for media and technology, public entities, complex construction projects, transactional risk insurance, generic pharmaceuticals and medical devices, long-term care facilities in the US, and renewable energy projects. For more information about RSG, visit ryansg.com. For more information about RT Specialty, visit rtspecialty.com. back to top

Andrew Stolfi appointed Acting Director of the Illinois Department of Insurance Gov. Pat Quinn has appointed Andrew Stolfi as Acting Director of the Illinois Department of Insurance, filling the vacancy created when former director Michael McRaith stepped down to become the first director of the Federal Insurance Office. Prior to Quinn’s appointment, Stolfi served as chief of staff and special counsel for policy and legislative affairs at the Illinois Department of Insurance. He was part of the leadership team responsible for implementing national health insurance reform in Illinois, and is an active participant at the National Association of Insurance Commissioners, where he chairs the Corporate Governance Working Group. Prior to joining the department, Stolfi was an attorney and policy analyst in the Office of the Governor. He has also worked as a judicial law clerk to Appellate Justice Thomas E. Hoffman and as a special assistant corporation counsel for the City of Chicago Law Department. Stolfi holds a bachelor’s of science degree from the University of Vermont and a law degree with honors from the Chicago-Kent College of Law. He is married with two children. back to top

Cyber Liability and Data Breach Insurance Claims - A Study of Actual Payouts for Covered Data Breaches by Mark Greisiger, President, NetDiligence In 2010, some 16 million confidential records were exposed through more than 662 reported security breaches, according to the national nonprofit Identity Theft Resource Center (ITRC). Most recently, in a blog post that appeared on April 26, 2011, Sony Computer Entertainment America reported a security breach of its PlayStation Network in which hackers obtained personal information on some 100+ million subscribers, resulting in a security investigation so broad it suspended business operations, and resulted in multiple class action lawsuits. In cases like Sony’s, insurers will help foot the bill for the data breach—an amount that has been estimated at up to $2 billion—and insurers are fielding increasing numbers of data breach-related claims. “Last year, privacy breaches ran about 1-2 per week. This year, it is more like 6-8 per week,” says Beth Diamond, Insurance Claims Focus Group Leader for Technology, Media and Business Services at Beazley Group. Diamond says the rising numbers are the result of increased legislation and companies’ heightened awareness about their legal obligations to report breach incidents. That cyber security breaches are now a painful reality for organizations of all kinds, at all levels, is well established. What insurers and corporate risk managers are looking for are more effective ways to predict and prevent these incidents while developing a greater understanding of their financial implications. This NetDiligence® cyber liability claims study, the first of its kind, examines where the bulk of these breaches are occurring and what kind of impact they have had on affected organizations. Major underwriters of cyber liability provided information about 117 events that occurred between 2005 and 2010, which we analyzed for emerging patterns. Among our findings: PII (personal identification information) is the most typically exposed data type, followed by PHI (personal health information). Topping the list of the most frequently breached sectors are healthcare and financial services. The average cost per breach was $2.4 million, with the majority devoted to legal services. While previous studies have shed light on data breach events through anecdotal information, this study uses actual cyber liability insurance policy reported claims to illuminate the real costs of such incidents. It is our hope that actuaries, risk managers and others working in the field of data security will use this information to properly price policies, perform more accurate risk assessment and establish better safeguards and action plans to protect themselves from data breaches. “Given the recent well-publicized events, this study is both timely and important because it sheds light on what is driving these incidents, demonstrates the real dollars that are being spent both dealing with the event as well as ultimate damages, and dispels the myth that data breach events don’t carry significant damages to organizations that are affected,” commented Norm Rafsol, Executive Vice President of ACE Professional Risk. Cyber risk management resources See the complete study from NetDiligence Subscribe to monthly Cyber Risk News Alerts from NetDiligence Privacy & Security seminar presentations Hiscox Global Technology News - Cloud Computing Hiscox Privacy Newsletter - Data Risks Baker Hostetler Data Privacy Monitor A to Z of Data Breach Response back to top

Lloyd's has a wealth of online resources! Did you know that Lloyd's has a Facebook page? A Twitter account? A YouTube channel? Have you visited lloyds.com lately? The site is a goldmine of resources for market participants. Brand guidelines for coverholders that help them understand how to bring the Lloyd's brand to life in their communications. Detailed information on Lloyd's ratings and the "chain of security". Social media. Multimedia. Blogs. Publications. News. Events. Research. CAT info. Market directories. Market intelligence. And much more. You can also become a registered user and gain access to enhanced content and services like Crystal - providing quick and easy information on regulatory and taxation requirements around the world, the QA Tool - providing experienced market specialists with periodic updates and prompts on contract quality requirements for open market and binding authority contracts, and the Wordings Repository - enabling users to view vetted policy wordings and clauses regularly used within the Lloyd's and London markets. Here are links to just a few of the Lloyd's resources available to you online. Enjoy! 360 Risk Insight Brand guidelines Facebook page Interactive history timeline Market Directories North American Broker Program Publications Quick Guide - who we are and what we do Ratings Statistics Twitter @LloydsofLondon US homepage Virtual Tour of Lloyd's YouTube channel back to top

Views expressed in this newsletter do not necessarily reflect the opinion of Lloyd's. While every effort has been made to ensure that the information given is accurate, no responsibility (legal or otherwise) is accepted by Lloyd's for any errors or omissions. Copyright © 2011 Association of Lloyd's Brokers