New cyber program manager will take risk engineering approach: Vitale

Resilience Insurance will combine risk engineering and superior risk prevention with a strong value proposition on risk transfer that has parallels with the FM Global model, according to the newly launched cyber program manager’s president Mario Vitale.

In an interview with The Insurer, the former Aspen Insurance CEO said: “When you marry those together it creates powerful, long-term partnerships and those clients stay forever.”

As reported earlier today, Resilience has rebranded from Arceo.ai and transformed into a full program manager underwriting on the AM Best A+ rated insurance carrier paper of Intact Insurance Specialty Solutions.

It is targeting the middle-market segment of businesses with revenues of $100mn up to $5bn and will take a proactive approach by assessing an organisation’s information security prior to writing coverage, and working with clients to mitigate vulnerabilities before they can be exploited.

In a statement announcing the launch, Resilience said that integrating dynamic security and risk engineering with insurance allows it to provide “holistic cyber risk management” for IT security and risk management professionals.

Vitale told this publication the name Resilience was inspired by the aim to help insureds bounce back from a cyber event.

“In theory every company will eventually be breached, so how do we keep a breach from becoming a loss, how do we keep a loss from becoming a large loss, how do we keep a loss from becoming a ransomware claim, or a reputational damage to a business,” he commented.

The executive said the start-up has been built to be more like an insurance company, with “world-class underwriters” including global CUO Emy Donavan and US CUO Charles Pruzinsky, and in-house claims led by chief claims officer Michael Phillips.

“You’re dealing with the person who sold you the policy and told you how to protect yourself. We also have great governance and have really built an insurance company, which is how we’ve been able to attract an A+ insurance provider,” said Vitale.

He added that the A+ paper from Canadian insurer Intact – which has also invested in Resilience via its Intact Ventures arm – will provide a competitive advantage over MGAs operating in the space.

Meanwhile, the panel of reinsurers supporting the new program manager also includes A+ rated operators.

The Arceo.ai technology platform that has been built over the last couple of years will be at the centre of the Resilience platform.

The insurtech platform has been licensed to intermediaries including Risk Strategies and Willis Towers Watson for the trading of small commercial risks.

At Resilience the tech platform can also do pre-breach assessment of risks, as well as issue policies and collect data that will enhance the program manager’s value proposition over time, helping it differentiate risks, said Vitale.

Security credits

Resilience will initially put out limits of up to $10mn depending on whether it is writing primary or excess layers, and the class within the full array of cyber products it will underwrite.

Its aim is to eventually build a portfolio of business that is more heavily weighted to primary than excess as it believes it will be more valuable as a primary player than an excess player, said Vitale.

“Our value really increases when we’re in a primary position where the dollars spent on risk transfer are more substantial and often the dollars spent on security are more than the insurance,” the executive said.

And, in another parallel with FM Global, he said Resilience would be able to offer security discounts to clients that improve their risk profile by utilising the program manager’s security partners and implementing the system upgrades it recommends. That way Resilience is tying itself to the security of its clients.

Vitale added that ultimately the goal of the program manager will be to take 100 percent positions on cyber covers for clients.

Strategic distribution

Resilience will look to sign up around 25-30 distribution partners in the US, ranging from the retail broker giants of Aon, Marsh and Willis Towers Watson to smaller regional specialty brokers that don’t have a cyber practice in-house.

Vitale said that the program manager will only accept business from those intermediaries it has signed up to strategic partnerships. It will train brokers at those partners in its offerings, with a focus on the cyber security capabilities it is bringing to clients.

“We’ll also ask strategic brokers to trade with us on the insurtech platform as we think that will be more helpful to them and to us, helping collect data we’ll need down the road to make us more valuable at differentiating the risk and pricing the product,” he explained.