Insurance Broker Aon Acquires Cyber-Risk Specialist Stroz Friedberg
October 11 2016 - 6:10AM
Dow Jones News
Aon PLC agreed to acquire cybersecurity specialist Stroz
Friedberg Inc., as more insurance companies and brokers aim to turn
corporations' exposure to potential hacking into a business
opportunity.
Stroz Friedberg was founded in 2000 by a former agent of the
Federal Bureau of Investigation and a former federal prosecutor,
both of whom worked on computer crime. The New York City-based
firm, which has more than 550 employees world-wide, will augment
Aon's risk-mitigation services, while also providing insights to
help insurers expand and create new cyber offerings, the firms said
in interviews with The Wall Street Journal.
The transaction is to be announced Tuesday. The companies aren't
disclosing terms of the deal.
World-wide, property-casualty insurers sold an estimated $2
billion to $3 billion of cyberrisk coverage in 2015, mostly in the
U.S., according to industry estimates. Cyber insurance can be
obtained from about 50 insurers, with such purchases increasing by
27% in 2015, compared with the year before, on top of a 32%
increase in 2014, according to Marsh & McLennan Cos. in a
report earlier this year.
Aon is one of the world's biggest insurance brokerages and is a
benefits consultant. Insurance brokers are middlemen who work on
behalf of companies as they buy insurance, and many develop
expertise in specific types of risk to make their services more
valuable to policyholders. They also work with insurers to help
them design policies that address clients' needs.
Aon executives said the acquisition reflects an urgency on the
part of the insurance industry to respond to clients who
increasingly are worried about hacking that could damage their
operations, as risk spreads far beyond the retailing industry and
the credit-card data that many cyberthieves covet, to factory
floors, power plants and even semiautonomous vehicles.
"There is a need front and center, in our face every day, and it
is growing in magnitude," Aon Chief Executive Gregory Case said in
an interview Monday.
Industry executives said there is a race within the insurance
industry to find ways to help clients understand and model
cyber-risk. American International Group Inc., and other insurers
and brokers have made investments in or joined with cyber-risk
specialty firms over the past couple of years.
Marsh & McLennan's Marsh brokerage unit, a rival to Aon, has
a collaboration with Cyence, a cybersecurity analytics firm, to
help the broker's clients quantify and manage cyberrisk.
Within cyber insurance, growth was strongest among manufacturing
firms in 2015, up 63% from the year before, Marsh said. With
technology incorporated into companies' essential operations,
carriers are now moving beyond an early generation of coverage that
focuses on theft of credit-card and personal data of consumers, the
brokerage said.
The traditional approach to creating coverage "would have been
taking historical data and assessing it," Mr. Case said. "The
market can't wait for the development of that history, the need is
too urgent."
Write to Leslie Scism at leslie.scism@wsj.com
(END) Dow Jones Newswires
October 11, 2016 05:55 ET (09:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
American (NYSE:AIG)
Historical Stock Chart
From Aug 2024 to Sep 2024
American (NYSE:AIG)
Historical Stock Chart
From Sep 2023 to Sep 2024