Page 16 - Insurance Times April 2017 Special Issue on Newindia

International

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Lloyds face £350m hit for Cyber insurance is gaining popularity: Swiss Re
Day by day cyber information theft is increasing and people are showing interest
mis-selling PPI
in cyber insurance to secure their business Swiss Re
Lloyds Banking Group has taken a emphasizes. In the Sigma report titled "Cyber: Get-
further £350m hit for mis-selling pay- ting to grips with a complex risk," Swiss Re said, "the
ment protec- costs of a cyber breach can escalate well beyond
tion insur- managing the fallout of lost or corrupted data."
ance (PPI), "Firms must now factor in the potential damage
s w e l l i n g to their reputation - physical and intellectual property - and also disruption to
what was al- business operations. The increasing scope and magnitude of potential costs as-
ready the banking sector's biggest sociated with cyber incidents reflect the ever-evolving cyber risk landscape,"
bill for the scandal. Swiss Re said.
The lender made the extra PPI pro- Three factors that make things rocky are speed of digital transformation, sophis-
vision after the watchdog set an tication of hackers' alertness and spread of hyper-connectivity it said. "Product
August 2019 deadline for filing claims and process innovation and also advanced analytics will help foster improved cyber
against banks, which was two insurance solutions and extend both the boundaries of insurability and reach of
months later than originally pro- cover", said an official of Swiss Re. Nevertheless, some cyber risks, especially re-
posed, and announced it would push lated to extreme catastrophic loss events, might be uninsurable, Swiss Re said.
firms to contact potential victims of
the scandal. It takes Lloyds's total hit Swiss Re promises a standard dividend of CHF of 4.85
for PPI to almost £17.4bn, the single per share
largest bill for mis-selling the insur-
ance of any lender. At Swiss Re's upcoming Annual General Meeting of shareholders (AGM) on 21
April 2017, the Board of Directors proposes
Last October, when Lloyds disclosed a regular dividend of CHF 4.85 per share. In
it had set aside £1bn to cover the the year 2016 the dividend stood at CHF
cost of mis-selling claims, Finance 4.60.
Chief George Culmer said "it would
Together with the share buy-back that fin-
be the last big PPI provision that we ished on 9 February 2017, this will bring to-
would expect to take". However, the tal pay-out to shareholders for 2016 to CHF
Financial Conduct Authority's (FCA)
2.5 billion. In addition, the Board of Directors requests the authorisation of a new
decision to move the deadline for public share buy-back programme of up to CHF 1.0 billion purchase value. The
claims from June 2019 to August
Board of Directors further proposes the election of Jay Ralph, Joerg Reinhardt
2019 and the ramifications of a PPI and Jacques de Vaucleroy as new members to the Board of Directors.
legal battle - the Plevin case - have
Swiss Re's Chairman, Walter B. Kielholz, says, "2016 was a year of profound
forced Lloyds to make this new pro-
changes. However, despite many difficulties, Swiss Re was able to stay on course
vision.
and deliver good results".
16 The Insurance Times, April 2017

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