Cyber-security has been on the agenda for several decades now - it’s a risk that many businesses are aware of and yet it’s also become something that we are almost too used to hearing about to prioritise. Despite the crucial importance of ensuring the right coverage and risk management is in place, many businesses still don’t meet the necessary standards. This has created a space in which there is plenty of opportunity for those brokerages that are able to step up to cyber-security best practice standards so as to set their business apart in terms of expertise and also become more competitive.
The evolution of cyber-security
The very first cyber insurance policies first appeared in the 90s and covered little more than a basic hack. Over the years these policies have evolved to provide extra risk management and post-breach services to insurance buyers. However, despite the amount of time and expertise that has been accrued since then a recent survey by Arceo found that a large number of chief security officers are just not able to get the coverage that they want. Given the increasingly interconnected nature of our lives and the growing importance of data - and protecting it - this emphasis on cyber coverage is only likely to become more prioritised.
Frustration and failings
Despite the fact that most of us know just how important cyber coverage has become there still seems to be a gap between that knowledge and the steps required to protect businesses and data. Twitter and Capital One are just two of the big brands that have found themselves on the receiving end of bad publicity and fines for not having the right precautions in place. These frustrations and failings impact businesses of all sizes, from the small and local to huge global names. COVID-19 has introduced yet another level of risk thanks to the huge numbers of people now working from home and the greater risks that home workers take when it comes to cyber-security.
Opportunities for brokers
The fact is that many companies still don’t have the cyber protection that they need and this is a big opportunity for brokers. There is an opportunity to sell these policies on their own merit and also via highlighting the issues that cyber-security breaches in the news have presented over the past couple of years. Brokers can position themselves as experts in highlighting the risks to individual businesses when it comes to cyber-security and offering standalone products that deliver better coverage. This is likely to require some self-education about the current cyber market and the gaps that exist for many businesses. An understanding of the market and also of the policy language is likely to be a huge advantage.
Brokers who are looking to evolve for the future must integrate cyber-security effectively. That means not only being able to effectively sell the products but also answer key questions that insureds have and provide ahead-of-the-curve information about emerging problems and risks. Given that this is going to continue to be a growth area in years to come, investment now is essential.