Brokers sell cyber insurance – but do they buy it themselves?18th March 2020
As the world becomes ever more connected and cyber risks become more of a threat to business, brokers face increasing demand to offer their clients a robust cyber insurance policy with strong levels of support and cover. Over the last few years, there has been much discussion around the role and rise of cyber insurance for end clients – but what about for brokers themselves?
Brokers need to lead the way when it comes to cyber insurance
According to the Association of British Insurers, only 11% of UK businesses have cyber insurance cover – a staggering figure considering that a third of businesses have experienced a cyber-attack last year, as reported by the Department for Digital, Culture, Media & Sport. In addition, analysis by Beaming suggests that UK businesses face a cyber-attack as often as every 50 seconds. A recent article in Insurance Age links this to the important role brokers must play in increasing the number of UK businesses with cover, and flags that in order for brokers ‘to be successful advocates of the product, it’s important that they take their own cyber risk seriously.’
“We believe that helping our brokers appreciate their own cyber exposure and providing them with a very competitive quotation, and extensive cover for their own risk, will in turn help them feel more confident in transferring this knowledge to their clients.”
More than just a cyber risk
Brokers cannot afford to expose themselves to these risks. With all eyes on cyber cover, the reputational and operational risks that would result from a broker experiencing a cyber-attack could be detrimental to their business. Reputation is particularly important on several levels – not only do clients need comfort that their own data is securely stored, but they look to brokers to place their own cyber cover, so must be reassured that their policies have been placed via experts.
CyberSafe is designed with brokers in mind
At NMU, we are actively trying to raise brokers’ awareness of cyber risks by providing them with real life examples where insurance brokers have suffered data breaches or cyber-attacks.
Cyber crime is on the increase, and insurance brokers are at as much risk of falling victim as any other type of business.
As an example of where this has happened, a broker’s email account was hacked and they were subsequently impersonated by a fraudster, who then tricked their client into making a payment into a fraudulent bank account.
Customer payment fraud
To explain Customer Payment Fraud in more detail, the following scenario shows how the insurance broker fell victim to this scam:
An employee at the insurance broker had their e-mail account compromised, which allowed the fraudster to monitor the insurance brokers inbox and identify an opportunity to misdirect funds from a customer who had just renewed their insurances.
The fraudster sent an e-mail from the insurance broker’s compromised e-mail account to one of the broker’s customers and explained that the premium needed to be sent to a different bank account. The broker’s customer had no reason to doubt this and without questioning the request transferred the premium over to this fraudulent account. It was only when the broker reminded their customer about the overdue monies that the cyber crime was uncovered.
The premium remained unpaid, and as the fraudulent communications appeared to come from the broker, their customer put the blame on the broker and refused to pay the premium twice. The upshot was that the broker accepted responsibility for the incident and actually paid their customer’s premium themselves as they didn’t have any cyber protection to rely on.
In this case, the primary victim of the loss was not the broker but in fact their customer and the crime cover on most cyber insurance policies would not be triggered. However, CyberSafe protects against losses of this nature.
Cyber & Financial Lines Underwriting Manager, Matthew Drinkwater, speaks about our commitment to addressing brokers’ needs:
“We believe that helping our brokers appreciate their own cyber exposure and providing them with a very competitive quotation, and extensive cover for their own risk, will in turn help them feel more confident in transferring this knowledge to their clients.
“Our cyber product, CyberSafe, aims to simplify the process for brokers selling cyber insurance to their clients, ultimately helping them to play out their important role of increasing cyber cover amongst UK businesses.
“We’ve created a very simple, slick and straightforward online quote and bind platform which has a minimal question set but provides extensive cyber liability and cybercrime coverage – which we’re continually reviewing, alongside the rating. The system also includes an immediate premium indication and target premium feedback facility, with fully contract certain quotations able to be obtained in a matter of minutes.”
CyberSafe e-trade platform
A short demo video of our platform can be seen below, which demonstrates its speed and capabilities: