DEPARTMENT: Office Of Risk Management
FILE TYPE: Consent Action
TITLE
title
Authorization To Renew Cyber Security Insurance With American International Group, Inc (AIG) Specialty Insurance Company
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PURPOSE/ACTION REQUESTED
Authorize the renewal and purchase of cyber security insurance contract with AIG Specialty Insurance Company.
SUMMARY
Dakota County has had a cyber security insurance policy since October 2019. In the intervening years, public sector entities have faced escalating levels of cyber security attacks. Cyber security criminals have increasingly turned to utilizing ransomware when attacking both public and private sector entities. The increased levels of attacks and the payouts by insurance carriers has led to a very difficult cyber insurance market. However, in the last 12 months, there has been a reduction in the attacks and the costs of the attacks. This has provided for some softening in the cyber insurance market, bringing with it a reduction in premiums. A market analysis indicated that rate decreases of five percent have been common for policy renewals in 2024.
Staff from the Office of Risk Management and Information Technology worked with the County's insurance broker, Arthur J. Gallagher, and the County's current cyber insurer, AIG, proactively over the last 12 months to identify opportunities to tighten IT security controls that would reduce the County's cyber threat and in turn, reduce the cyber insurance premium. One specific area of tightened controls involved reducing the number of domain level admin accounts which was a critical risk identified by our insurance carrier.
The County's coverage was marketed on a limited basis since many cyber security insurers do not write policies for public sector entities. AIG Specialty Insurance Company, the County's incumbent insurer, responded with a renewal quote that reflects a reduction in annual premium from $127,300 to $102,500 (19%). This is a significantly higher reduction than the m...
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