SMEs are increasingly vulnerable to the threat of a cyberattack: that’s the message that the insurance industry needs to get across to clients, according to the executive director of NMU.
“Everybody is susceptible to this – virtually all businesses collect and store personal information on customers and employees,” Nick Limb told Insurance Business. “I think in the past, some of the SME market thought that this was just a risk in the corporate world, for the major PLCs and American firms. But I’ve heard of small building firms in the UK who’ve had their invoices doctored, and funds re-directed,” he explained.
Earlier this month, NMU revealed a new computer, data and cyber policy in response to the growing demand for cyber insurance, which replaces its existing computer offering.
“It’s the way of the world. If you look at digitisation and the inter-connection of the world, in almost all areas of the economy, cyber risks constitute some of the greatest risks we face,” Limb commented.
With major cyber-attacks dominating headlines, both private individuals and companies are becoming more and more aware of this exposure and are seeking protection, according to the director.
The launch of the new policy, which extends NMU’s existing computer policy into cybercrime, cyber liability and data breaches, is a “natural progression,” driven by trends such as digitisation and the IoT, as well as the growth of virtual business models and legislative changes such as the EU General Data Protection Regulation, which comes in next year.
“There’s a lot of talk, and it’s a big market space - this market is constantly adapting to world events and that leaves a big space for insurance providers to fill,” Limb noted.
NMU’s policy will be tailored to its client base of small to medium sized businesses, but with the backing of parent company
Munich Re, it has access to a wealth of expertise on the subject.
“NMU wants to capitalise on the strength of its parent company and other Munich Re-owned entities to provide a more comprehensive product to its marketplace,” commented Limb. “Data breaches aren’t just a big business problem; small and medium-sized businesses with fewer data security resources are particularly vulnerable.”
Across primary insurance and reinsurance, Munich Re wrote around $263 million in premium on cyber last year, and NMU is hoping for a slice of the action too.
“We have an existing core client base of computer policyholders, who in the first instance we will try to upsell the better cover to. As long as we get the price point right, it’s a better, more comprehensive cover, and it’s catering to events that are changing daily,” Limb said. “There’s a lot of work that’s been put into this behind the scenes over the years, and I would hope that the take up would be very high.”
He added: “I think it’s the duty of the insurance industry to put products out there and to educate the market. This is massive, everybody is connected, and I think it goes from the one-man-band up to the multi corporate conglomerates. We have to be better at getting that message out.”
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New data protection laws to have “considerable impact” on insurance industry
