The cyber insurance landscape has changed more dramatically than most, if not all, other markets in the last 10 years – worryingly, this rapid evolution has left some brokers feeling out of the loop or not quite confident when it comes to explaining the situation to clients.
James Crowther, general manager of emerging risks at Agile Underwriting, has been in the space for around a decade – he agreed there’s been significant movement during that time.
“Ten years ago, when I first moved into cyber insurance underwriting, the market was obviously much less sophisticated,” Crowther told Insurance Business. “Cyber insurance tended to be purchased as an add-on to existing products, like management liability or professional indemnity, rather than its own standalone product.”
Today, cyber insurance products are far more specialised – not only are they standalone products, but they also tend to include crisis management or incident response costs as part of a package.
In fact, many cyber specialists now position themselves as providers of crisis management and remediation capabilities, rather than as simply reimbursing the clean-up costs of a breach.
According to Crowther, it’s here that brokers can really make a significant impact on their clients – as long as they’re informed and up to date.
“Brokers have a real responsibility to work through these issues with their clients,” he said. “What sort of security measures do they have in place already? Are they prepared for when a breach does occur? For example, is there a breach response management plan in place, and how should they notify their insurer? Given the world we live in, being uninformed or unprepared just isn’t an option anymore.”
Of course, cyber insurance has only evolved so rapidly because it was forced to do so by the new and emerging risks which are a constant in the technology landscape.
With the increased emphasis on cloud computing, many businesses are now at far greater risk of a breach – because they’re not necessarily aware that they need to maintain their own robust security hygiene beyond what the cloud service providers offer.
“The biggest thing we’re seeing at the moment is Business Email Compromise, or BEC, which seems to have risen in frequency along with the use of Software as a Service (SaaS) email software such as Office 365,” said Crowther.
BEC refers to when a cybercriminal gains access to a user’s login credentials, usually via a phishing email, so they can then log into the email account.
“The hacker often then impersonates someone from inside the business, and tricks other staff into handing over compromising information or in some cases the businesses financial assets,” said Crowther.
Data breaches have also become particularly pronounced due to the increased use of SaaS programs and cloud computing for managing emails and data storage in the workplace.
“If an outsider is able to gain access via BEC, it’s frequently possible for them to gain access to the whole network from there,” said Crowther. “The compromised email account might be used for resetting passwords for other critical services or launching attacks – it’s a security issue that brokers need to be aware of in order to educate their clients and own staff.”
