Benchmarking small business’s cyber risk based on industry and turnover needs to be reviewed, an expert has said.
Many cyber policies currently price their risk based on business turnover and industry sector which “just doesn’t make sense,” according to Dougal Hawkes, founder and CEO of cyber risk and assessment firm
Augmentor.
“The objective from the underwriter’s perspective is to build a quality book but making decisions in the SMB market based on turnover and industry sector alone cannot guarantee a quality outcome for either party,” Hawkes told
Insurance Business.
“It is important to understand your starting point and your benchmark. No-one is expecting to be, or will ever be, 100% protected but an improvement in business resilience could lead to reduced premiums or enhanced policies in the future.”
With mandatory breach notification set for next year, alongside major legislative changes in the European Union, the current cyber landscape is a “minefield”, Hawkes noted, and understanding the actual make-up of a client’s risk is vital for brokers.
Cyber risk is a constantly moving target, but Hawkes noted that benchmarking forms a key part of further educating business owners about the risk and the need for insurance. He explained that brokers can sit with clients and discuss all aspects of their cyber risk, including identifying which risks can be mitigated by security and other aspects, and which should be transferred.
“Who knows that organisation or client better than themselves?” he asked.
“Don’t guess at it; sit down with your client and ask them. You’ll get a better understanding with your client and, hopefully, that trust level that is waning in the industry will be improved and enhanced,” Hawkes concluded.
Related stories:
Veteran broker unveils new cyber business
Can the industry keep pace on cyber?
.jpg)
