Cyber insurance must focus on prevention to succeed
Cyber insurance must focus on prevention to succeed, according to GlobalData Financial Services.
The insuarance industry is striving to target the cyber insurance space, with new product announcements from leading players occurring on a weekly basis.
However, after years of developing a sense of how to do this, there remain challenges on getting to grips with what customers want, how to communicate the product to them, or how the market may well evolve, according to GlobalData Financial Services.
For now, cyber cover is a product largely restricted to commercial lines (though the HNW market is a base from which a personal lines market is growing). ut cyber risk, and how people attempt to prevent them, is evolving at a rate insurers are not used to. What is clear is that a traditional approach will not work – Prevention plus cure is where the market has had to go.
A number of commercial cyber policies have already identified this in including some form of service from the outset to hack-test your business. Companies and individuals will require a tailored approach, based on their individual habits, risks and devices.
Looking further forward, automated cars have the potential to completely revolutionize the motor market. With human error no longer a factor, fleets of cars could be insured together by the providers. Furthermore, the AI technology and automation will make data increasingly critical, meaning cyber cover could become the most essential personal lines product.
The most pressing issue for insurers is arguably educating customers. Letting them know what their risks are, what they are covered for and why they need it. A recent Hiscox study, from its CyberClear Academy found that 67% of cyber claims are caused by employee error.
One company set to break away from the generic offerings to provide a tailored service, based on educating the consumer and prevention, is Bewica, who launch its cyber insurance product later this year.
The cyber specialist currently offers free AI-based cyber risk assessment and tailored recommendations to businesses. It monitors threats in real-time and can update protection measures accordingly.