AIG taps into consumer fears with new cybersecurity product
The U.S. insurer plans to roll out a product on Monday that offers coverage for expenses that arise from online bullying, extortion and other digital misdeeds. Called “Family CyberEdge,” it includes public relations and legal services, as well as at-home assessments of family electronic devices, executives said in an interview.
Wealthy, high-profile individuals have increasingly become hacker targets, said Jerry Hourihan, president of AIG Private Client Group for the United States and Canada. Social media use and online financial information make them vulnerable.
“They are more exposed than they ever have been,” Hourihan said in an interview.
AIG’s product follows cyber offerings from rivals, along with services from credit-monitoring firms and companies like Reputation.com – a trend that is poised to accelerate as people share more information online, analysts said.
Consumers now share loads of personal data on websites and apps and store photos and sensitive information in cloud platforms.
At the same time, high-profile hacking attacks have drawn global attention to the seriousness of cyber threats. Yahoo Inc, Target Corp and the U.S. government have been targets of sophisticated data heists, as have celebrities like Leslie Jones and Jennifer Lawrence, whose nude photos were hacked and leaked.
The U.S. government is poised to undo some privacy protections. Congress last week voted to allow internet service providers like Verizon Communications Inc and AT&T Inc to sell consumers’ search data.
“Whenever you see a lot of news about something that is a risk, you usually see insurance companies trying to jump on that,” said Robert Hunter, director of insurance for the Consumer Federation of America.
AIG’s product came after customers asked for protection, Hourihan said. His unit caters to very wealthy individuals and typically insures assets like wine collections and fine art.
Policies cost roughly 10 to 15 percent of a homeowner’s premium, Hourihan said. They also cover restoring data and monitoring cyber threats.
Last year, a U.S.-based unit of German insurer Munich Re launched a personal cyber security policy that covers expenses like malware removal and online fraud reimbursement, according to its website. Premiums vary, but typically cost less than $100 for $25,000 to $50,000 worth of coverage.
New York-based PURE Insurance launched its cyber security product in 2015. -Reuters