MMC Marsh and McLennan Companies Inc

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)

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