The Kelowna, B.C. tech industry has seen more than 30% growth in the last two years, resulting in demographic and cultural changes to the city.
A National Post report states the economic impact of the Kelowna tech industry is currently $1.3 billion. As of fall 2016, there were 633 tech companies in the city, employing 7,600 people – 52% of whom are below the age of 35.
Such a flourishing industry has also opened opportunities for insurance brokers – if they know how to tap into tech culture.
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Brody Stonehouse, vice president of AC&D Insurance told Insurance Business that brokers need to be aware of the changing needs of younger clients.
“The young demographic doesn’t particularly affect policies but it does change the way brokers need to react with their clients,” he said. “Younger clients want much less in-person interaction. They want to do everything online and via email.”
Some tech start-ups are overlooking cyber liability because it is not a contract requirement, according to Stonehouse. He said brokers need to educate clients about cyber liability - and if the client is not willing to take that information, to send it to them in writing.
“The most common gaps lie within the cyber liability area,” he said. “Start-ups often purchase general liability insurance. The younger demographic is buying insurance to meet a contractual requirement. When they get to the quotes they often don’t bother with cyber liability because it’s not a requirement for them. The requirements of the government haven’t caught up to the needs of the client.”
Kelowna’s tech boom is a result of young people being priced out of nearby Vancouver and the construction of an $11 million innovation centre in Kelowna’s downtown core, according to the National Post report.
This trend has influenced the insurance market.
“There’s been a lot of growth in Kelowna and a lot of contracts going out,” said Stonehouse. “We have seen an uptake in customers understanding the available insurance coverage and an increased awareness after recent cyber incidents. If you are dealing with sensitive information, then you must have cyber insurance.”
He added: “Even if the client chooses not to purchase the cover, the broker must make them aware of it. Brokers need to push cyber liability and educate clients about things that aren’t commonly purchased. We must offer everything now and include an explanation of what it is.”
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