November 20, 2020 – The demand for securing hybrid and digital events rose rapidly in the corona year. The specialty insurer Hiscox is recording significant growth in new business here. Hiscox manager Peter Pillath spoke to VersicherungsJournal about risks, coverage, the uncertainty factor technology, claims and prospects.
For three years the Hiscox SA, branch for Germany together with Event-Assec, a brand of Compact-Team GmbH & Co. KG Versicherungsmakler, offers protection for events. In August, the company expanded its offer to include digital offers due to the changed conditions due to the spread of Covid-19.
Due to the pandemic, events in Germany had to be canceled: including the ITB tourism fair in Berlin (VersicherungsJournal Medienspiegel March 4th, 2020). The initiators of the industry event for the insurance industry reacted and ran their trade fair as the first hybrid DKM 2020 by (10/28/2020, 6/16/2020).
- Peter Pillath (Image: Hiscox)
Hiscox secured the leading trade fair. “Our experience as an insurer for IT companies and a provider of cyber insurance has helped us a lot in transferring our event insurance into the digital world,” says Peter Pillath, Underwriting Manager Commercial Property at the specialist insurer.
The greatest risk are technical problems
The expanded event policy now covers “in addition to face-to-face events also exclusively digital, hybrid or digitally supported events,” says Hiscox. This includes, for example, company general meetings, concerts, congresses and trade fairs such as the DKM.
The product consists of three components: property insurance that protects equipment such as servers, cameras or sound technology; a liability as well as a cancellation policy, which covers investments and costs of the respective event.
“The biggest risk with a digital event are technical problems. Because every hour or a whole day of downtime costs money and is irretrievably lost for the organizers, ”explains underwriter Pillath. However, the manager states that you cannot cover all eventualities. In addition to technical failures, he also sees the risk of human error and attacks by cyber criminals.
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Coverage: What does the customer want to cover?
Hiscox checks various aspects in advance for digital events: In the technical environment, for example, the available server capacities play an important role. The national locations of the hardware are important for compliance with data protection regulations.
In addition, the insurer holds talks with the responsible IT manager and the contracted service provider. “When assessing the risks, we of course also rely on experience,” explains Pillath.
When it comes to the level of premiums for event insurance, the coverage modules are decisive: for example, does the customer want to secure their estimated profit against loss? Is the failure of one or more key speakers insured? Should cyber modules be integrated?
Here, too, prevention such as an appropriate firewall, special security software and monitoring is rewarded. According to Pillath, the cost of insurance is between 0.5 and 1.5 percent of the sum insured.
Claims rates could increase for event policies
When asked, the Hiscox manager also comments on the damage in this business area. “So far there has not been a major event that has been completely canceled. But there were technical problems such as defective servers. ”Attacks by hackers, according to the underwriter, have“ so far not been successful ”.
However, the insurance industry expects an increase in cases in this segment: This is shown by a survey by the consulting company Ernst & Young GmbH Auditing company and the VERS Leipzig GmbH among the management staff of 30 insurers in Germany and Austria.
In the opinion of the respondents, the loss rates for various insurance products will increase, in particular for business closure insurance, event failure insurance and travel cancellation policies (23.9.2020).
We will see more hybrid and more digital events in 2021. And thus the need for coverage will continue to increase.
Peter Pillath, Underwriting-Manager-Commercial-Property bei Hiscox.
Sharp increase in new business
The development of default insurance for the specialist insurer was probably rapid in the current year. “We have seen a sharp increase in new business since May. The digital trend for events such as concerts, congresses or trade fairs has established itself. People have made friends with technology, ”explains Pillath. He does not name specific sales figures.
The manager is optimistic about the coming year. “We will see more hybrid and more digital events in 2021. And with that, the need for coverage will continue to increase. “
The company’s strongest product is still classic cyber insurance. “Cyber has developed into the fastest growing product at Hiscox Germany in recent years,” said the VersicherungsJournal in October. Around 15,000 corporate customers say they would trust the specialist insurer (October 16, 2020).
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