The Lloyd’s market has significant gross exposure to any loss arising from the Marriott data breach, with the market writing about $150mn of the $350mn placement, The Insurance Insider can reveal.
As this publication has previously reported, the cyber market is expecting its largest insured loss to date from the Marriott data breach, which affected 500 million customers.
At the time, the cyber market was anticipating a claim in the region of $300mn from the breach.
Sources speaking to this publication have now suggested that Lloyd’s will take a significant portion of any resulting loss.
The exposure is concentrated in four Lloyd’s-only layers on the Marriott cyber stack: a $10mn xs $20mn layer; a $50mn xs $50mn layer; a $25mn xs $150mn layer; and a $25mn xs $225mn layer.
Lloyd’s carriers and coverholders have also taken lines on various other shared layers on the placement.
Sources estimated that the combined amount of limit written by Lloyd’s on the Marriott placement was in the region of $150mn.
A handful of insurers and MGAs have written more than one line across the tower, including Brit, Markel, Axis, Beat Capital’s Tarian Underwriting and Channel. Hiscox also has a line on the placement.
Lloyd’s carriers are typically heavily reinsured and, as a result, the reinsurance market will likely absorb a significant portion of the Marriott loss.
Munich Re is a significant player in the cyber reinsurance space. However, depending on each syndicate’s reinsurance arrangements, this loss will also likely seep into parts of the broader casualty treaty market.
The Marriott cyber placement is written across the US, London and Bermuda markets.
As previously reported, AIG is the primary carrier on the placement with a $10mn layer in excess of a $1mn retention. Starr is the first excess carrier with 100 percent of a $10mn xs $10mn line.
The largest corporate carriers, including Zurich, Berkshire Hathaway, Travelers, Axa XL and Allianz Global Corporate & Specialty (AGCS), feature on the placement but are expected to be relatively underweight on any final Marriott loss.
AGCS, for example, has two lines on two separate layers on the tower, but only has gross exposure of $15mn, according to sources.
Beazley – one of the largest players in the cyber market – has written a single line on the top $50mn xs $300mn layer, and will therefore elude any payout if the final claim does come in at the estimated $300mn.
It shares the top $50mn layer with seven other US and Bermuda-based markets.
All companies mentioned in this article were contacted for comment.
A Marriott spokesperson commented: "It is premature to estimate the financial impact to the company. Marriott carries insurance, including cyber insurance, commensurate with our size and the nature of our operations. We are working with our insurance carriers to assess coverage."