Insurance brokers hoping to differentiate themselves in the marketplace should look to cyber security as a great opportunity.
The global annual spend on cyber insurance has skyrocketed over the last few years. The vast majority of spending is happening in the US, leaving room for massive growth in other countries, particularly in South Africa, where this product is in its infancy.
This is according to Simon Campbell-Young, CEO of MyCyberCare, adding that the demand is only set to soar as regulatory environments become increasingly stringent, and acts such as POPI are passed. “Increased regulations mean greater responsibilities for organisations, and in turn, harsher penalties imposed when these responsibilities are not met.”
So what can brokers do today to better serve their clients in the cyber security space, and how can they develop their services to meet future requirements? “We all know that the majority of attacks we see today would fail if employees stuck to the security guidelines laid out by the business. People still click on that dodgy link or attachment; it’s inevitable that they are the weakest link.”
A broker who wants his services to stand out should consider offering sound advice along with his cyber insurance offerings, and help clients understand the risks, and how to design and implement a good security policy to start with. “Even better, a broker should consider getting himself certified on the subject,” Campbell-Young says.
In many organisations, having good security practices in place will help to prevent a good number of the threats we see today, he adds. “But relying on this is not a good idea. They need to ask themselves the difficult questions, such as what the worst case scenario could be if they fell victim to a breach, how it could affect the business, and whether or not they have the ability to uncover a breach in time to minimise the fallout.”
He says with today’s advanced threats, it is taking business several months to realise that they have been compromised. “This is an awfully long time to have malicious actors lurking around on your networks, looking for bits of information they can exfiltrate, and potentially damaging your systems in the process. It is often too late by then, costing the company so much in data loss, reputational damage, and regulatory fines, that they end up shutting their doors.”
Brokers need to understand that there isn’t a ‘one size fits all’ product to manage cyber risk and offer coverage. “It’s about working with your clients, to help them manage risks, prevent incidents, and if the worst comes to the worst, help them understand how to respond to them. Clever brokers are adding cyber insurance to their offerings, and are working with established businesses, such as MyCyberCare to fully understand the risks, and ensure their offerings are comprehensive enough,” Campbell-Young says.
It’s no good insuring bricks and mortar alone. “In our information economy, data is unquestionably a company’s most valuable asset. Having that data lost, stolen, exposed or compromised could be catastrophic for a business. It’s a no-brainer really; cyber cover is an essential today.”
Brokers are starting to realise that cyber risk goes way beyond a data breach. New technologies are driving a slew of threats that can impact insurance cover. “They need to work with an established cyber insurance provider to make sure they have covered all the bases. With the number of threats rising every day, there is a massive opportunity for them to up-sell to security savvy businesses.”