A spawn of new entrants to the cyber market in Canada means there is often a lack of consistency when it comes to policies – a challenge for the broker community, according to one expert.
The cyber market is widely accepted to be experiencing a boom – Lloyd’s chief Inga Beale predicted a surge in policy sales in 2017, after the London market saw a 50% rise in sales last year.
But there are still significant variations in cyber regionally, with the US market far ahead in terms of sales, thanks to stricter regulations.
So how is Canada faring?
“I think it’s probably on par with what the UK is doing right now,” Lindsey Nelson, international cyber team leader at
CFC Underwriting, told
Insurance Business.
“The US is certainly still the biggest market for buying coverage, because they have those mandatory notification requirements,” Nelson said, explaining that the UK and Canadian markets share the commonality that they are not the US – and because of this, need to be treated differently.
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“To treat a Canadian client like a US client would be doing everybody a disservice, and we wouldn’t be able to sell policies that well,” she explained.
Because of the proximity to the US, and the likelihood of Canadian firms having US clients, the Canadian cyber market does tend to see higher claims activity, according to Nelson.
CFC
handled over 400 cyber-related claims in 2016 – up 78% from 2015 – and around 17% of these were from Canadian clients.
When it comes to brokers, Nelson said there are a “few key people” in the market really focusing and specialising in cyber, but there is room for growth when it comes to education.
Many brokerages are starting to lean towards having specialists, she said – making one person responsible for educating the office on all things cyber.
Due to the increase in demand for cyber, there have been lots of new entrants to the market, which has left a lack of standardization across policies.
This can be “confusing” for the broker community, Nelson said, and means they need to spend more time reading through policy wordings and working out what the coverage is.
CFC invests a lot of time in educating and training its brokers, Nelson explained, but “it still takes quite a bit of a combined effort for us to work with our broker partners in getting that message out.”
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