A report released yesterday claimed that
brokers are failing clients when it comes to cyber insurance. Research from
CFC Underwriting found that over half of UK-based SMEs claim their broker has not even raised the issue of cyber coverage with them, despite being one of the hottest topics in the industry.
However, one cyber head says that brokers are being pushed into a “more advisory role,” rather than just handling placement, when it comes to cyber.
The cyber insurance landscape is changing as the industry begins to understand the risks better, and as regulation forces it into action, Ben Beeson, cyber risk practice leader at broking giant Lockton, told Insurance Business.
Until now, the industry has been focusing on the “wrong problem,” – the lack of historical data, which actually has limited value in the fast-paced cyber landscape.
“The risks keep changing, they keep evolving. So we actually shouldn’t be focused on historical data… we should be collaborating with others, particularly in the technology sector, to find data which can help both our clients qualify the risk more accurately, and help the insurers and reinsurers price it,” Beeson explained.
While the cyber insurance market is already “buoyant”, regulation, such as the GDPR in Europe, along with increased collaboration with tech firms will push the industry towards a clearer consensus in the future, he believes.
“What we’re going to see, I think in the next year or so, quite quickly, is a shift from what has been a bit of a demand and supply pricing mechanism, to one which is going to be much more focused on actually understanding the risk, more accurately, through the data that will be harnessed from these different sources,” he said.
With clients increasingly leaning on brokers for advice in assessing how and where their assets are exposed, finding the right data to make accurate assessments is just as important for brokers as it is for insurers.
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