Beazley Launches Innovative FLEX Consortium for Insurers
In the face of an increasingly complex risk landscape, financial institutions are continuously challenged to find innovative insurance solutions. Responding to this urgent need, specialist insurer Beazley introduces its FLEX consortium, an extensive offering designed to revolutionise risk management for financial institutions.
The FLEX consortium marks a pivotal change in the industry’s approach to insuring financial institutions. By merging various risk areas into a single, cohesive policy, Beazley strives to both streamline the insurance process and enhance protection against a dynamically evolving threat landscape. This innovation comes at a particularly critical time as the insurance sector, especially within cybersecurity, confronts unprecedented challenges and seeks new resilience strategies.
Integrated Risk Management Framework
The FLEX consortium extends a comprehensive solution to financial institutions globally, with the exception of those in the US. This robust offering encompasses a wide spectrum of risks including civil liability, crime, fraud, directors & officers (D&O) liability and cyber threats.
Moreover, Beazley's Full Spectrum Cyber, which encompasses proactive, real-time and post-incident cyber services, leverages cutting-edge expertise from Beazley Security to benefit its clients.
By consolidating these coverages under one umbrella, FLEX addresses the potential gaps that might emerge from managing multiple policies separately. The consortium notably offers substantial coverage limits up to €54m (US$50m) or US$50m, based on clients' preferences. This unified approach doesn’t only simplify the insurance process but ensures wide-ranging protection against a diverse set of risks.
Clients looking to benefit from the FLEX consortium can access it through two primary channels: Lloyd's and Beazley's European insurance company paper.
"We have worked closely with our clients and brokers to create a solution that offers them the simplicity, efficiency and advanced protection they need to better manage complex and interconnected threats in one single policy.”
Emphasis on Cybersecurity
A key feature of the FLEX consortium is its pronounced focus on cyber coverage. At a time when the cyber insurance market is growing rapidly, Beazley leads globally with a 6.68% market share and an impressive £827m (US$1.06bn) in gross written premiums for the year 2023.
The incorporation of cyber coverage within FLEX is particularly crucial in the current climate of the cyber insurance industry, which is facing a surge in attacks and significant outages. Warren Buffett, a prominent investor, has expressed caution, advising Berkshire Hathaway's insurance agents to sell cyber policies only if absolutely necessary due to the potential for unexpected cost accumulations.
Additionally, major insurers like Marsh McLennan and Zurich Insurance Group have recently advocated for government involvement to ensure cyber risk, illustrating the severity of some cyber-attacks to be on par with terrorism and flooding.
"By bringing together our market leading cyber and financial institution experts, FLEX will actively reduce the risk of gaps in cover and build the resilience of our clients."
Towards Sustainable Cyber Insurance
Despite these myriad challenges, the inclusion of cyber coverage in the FLEX consortium underscores the industry's proactive efforts to control such risks, benefiting companies of various sizes. By integrating cyber coverage with other key risk areas, Beazley is likely setting a precedent for a more sustainable form of cyber insurance with minimized coverage gaps.
Aligned with Beazley’s broader strategy to mitigate evolving risks in the financial sector, the company launched Beazley Quantum earlier this year. This cyber consortium focuses on large corporations and introduces US$100m of new capacity into the cyber market, accessible via the Global Wholesale platform through Lloyd's.
As digital threats continue to advance with technologies like AI, the insurance industry is pressed to evolve. The FLEX consortium represents a crucial advancement in this direction, providing a comprehensive solution that appreciates the modern nature of risks.
‘The best approach to understand and mitigate complex risks is often through innovative solutions that integrate multiple coverages,’ notes a Beazley spokesperson.