With cyber risk taking its rightful place high on the risk registers of businesses of every size and scale, cyber insurance is rapidly leaving behind its ‘new-kid-on-the-block’ designation. Offering her perspective on how cyber insurance is coming into its own, Emma Drouineau, sales manager at CyberCube, highlighted that it has been ranked as the number one risk for UK businesses for the fifth consecutive year.
“We’re seeing international growth in terms of both the demand and interest of insurance buyers,” she said. “The US is a much more mature market, but we’re seeing some growth in Europe recently, especially in countries like the UK, Germany, Spain, and across Scandinavia.
“These markets are being increasingly identified as growth opportunities, especially by brokers who see the opportunity not only to grow their business but also to really deepen their understanding of cyber risk, and how these services add high value to their clients.”
That’s not to say the cyber insurance market is without its challenges for brokers, she said, and her team has identified education as a key pain point impacting brokers looking to grow their book in this product line. Even today, most businesses do not have a good understanding of cyber risk and their own specific cyber exposures.
She noted that this is especially true among SME businesses, which still tend to think they don’t have any meaningful exposure to cyber threats and that cyber attacks are targeted at larger organisations. That is simply not the case, she said, and the proliferation of cyber attacks is increasingly targeting small and medium-sized companies.
“Education is a real challenge for cyber brokers because it’s that education that allows their clients to stay on top of industry trends and evolving cyber threats,” she said. “So, the real question for brokers is how they can become knowledgeable cyber risk advisors for clients and provide access to adequate data-driven recommendations.
“The other challenge, which is related to that education piece, is how we can bring companies from that SME segment into the cyber insurance market. The SME segment is largely untapped when it comes to buying cyber insurance. So, this is where brokers need to focus when it comes to providing the right tools and the right service to better educate these companies and help them deepen their understanding of cyber risk, and so, create a better risk mitigation strategy for the board.”
Given the sheer scale of cyber risk, there is significant potential for future growth in this insurance market, Drouineau said, and she sees a real opportunity for brokers to be at the forefront of unlocking that growth – and to showcase a strong and unique value proposition to their clients. Being educated about cyber risk offers the chance for brokers to strongly differentiate themselves from their competitors, but also to add to their own market knowledge and expertise.
Building the right partnerships is at the heart of enabling brokers to make the most of that opportunity, she said, and so, a key area of focus for the CyberCube team is on nurturing strong partnerships with their brokers to empower them to have the right conversations about cyber risk. That’s the role CyberCube plays in the insurance ecosystem – providing brokers with the right data, insights, and targeted information that they need to deliver data-driven recommendations and solutions.
“Our solutions help brokers generate cyber risk reports that contain all the cyber data and education that they need to answer their clients’ most frequently asked questions,” she said. “That’s questions like, what are we exposed to and how exposed are we to these different types of threats?
“That’s what allows us to quantify what their insurance requirements are and what would be an appropriate coverage for them to adequately and appropriately mitigate their exposures. Our reports look to provide the most targeted and simplified information. That’s what clients need, they don’t need to be faced with complex cybersecurity jargon. They want to get straight to the point – and that point is these data-backed broker recommendations.”
As the cyber insurance market continues to mature, the amount and quality of data analytics continue to advance, and Drouineau is seeing first-hand how this is being used to unlock the market’s potential. But it all comes back to empowering brokers, she said, because they are the ones on the front lines of having discussions about cyber risk with their clients.
What has been both interesting and rewarding to see is the impact of increased education initiatives and data-driven insights, and how it’s changing the conversations brokers are having with their clients. The main difference, she said, is that brokers used to tell her team that most of their clients didn’t believe they were exposed to cyber risk and so, didn’t see the need to buy cyber insurance.
Whereas now, there’s a stronger understanding of cyber risk and the role cyber insurance plays in mitigating that exposure. And so the conversation has evolved, she said, and now clients are asking how they can get access to the right data, how they can better understand their cyber risk, how they can access more information to become more educated about cyber risk, and get the right answers to questions they weren’t even asking just a few years ago.
