Chubb is making its Cyber Risk practice a standalone business and bringing in an executive from a D.C.-area management consulting firm to lead it.
Bill Stewart is the new division president of Chubb’s Global Cyber Risk Practice, and his main mission is basically to anticipate future cyber needs, both for customers and the insurer itself. Before Chubb, Stewart was executive vice president at Booz Allen Hamilton, where he handled the firm’s Commercial Cyber business. He first started at Booz Allen in 1989 and worked his way up the leadership ranks, according to Chubb’s announcement.
Chubb said Stewart will lead the development and launch of the insurer’s strategy to bring out next-generation property/casualty cyber insurance products around the world. The plan is for the Global Cyber Risk practice to handle Chubb’s risk transfer, loss mitigation and incident response services for rapidly evolving cyber threats faced by both individuals and businesses.
In a related move, Stewart will also work with David Cowart, Chubb’s chief information security officer, and the insurer’s Enterprise Risk Management team to develop cybersecurity best practices for the company.
John Lupica, vice chairman, Chubb Group and president, North America Major Accounts and Specialty Insurance, said that making the Cyber Risk practice a standalone business and adding a “forward-thinking leader” such as Stewart to lead it helps give the insurer “another level of depth and thought leadership” in its cyber insurance development and planning.
Stewart’s “extensive knowledge of global cyber risks, coupled with his background and experience in providing cyber counsel to organizations across different industries, will complement the underwriting, servicing, claims handling capabilities and enterprise risk management that distinguish Chubb in the market,” Lupica said in prepared remarks.
Meyer Shields, managing director, equity research, property/casualty insurance for Keefe, Bruyette & Woods Inc., said that it makes sense for cyber insurance to be its own unit at a carrier.
“The risks are so complex, and are evolving so rapidly, that it’s much better to have a cyber leadership team that is as independent as possible,” Shields told Carrier Management via email.
As far as the new Chubb unit’s focus on developing next-generation coverage, Shields said he “would categorize virtually all cyber insurance as “next gen.”
“Even if that’s not perfectly accurate, I think it describes the right mindset,” Shields said.
Chubb’s strategic action comes as the cyber insurance business continues to grow rapidly. Property/casualty insurers wrote $1.35 billion in direct written premium in 2016—35 percent higher than in 2015, Fitch Ratings and A.M. Best said in recent reports.
Chubb is among the largest cyber insurance writers, which also include American International Group and XL Group. The three produced a combined market share of about 40 percent as of the end of 2016, the ratings agencies said.
Berkley Corp. is among insurers seeking to build their cyber insurance market share. Last November, it hired former Chubb executive Tracey Vispoli to lead Berkley Cyber Risk Solutions, an operating unit that will offer specialty commercial insurance coverages globally to Berkley member insurance companies. Vispoli was previously a cyber liability insurance leader at Chubb.