Commercial brokers must embrace cyber insurance in order to realize the full potential of this increasingly essential form of cover.
There is still limited take-up of cyber insurance among brokers. According to our 2016 UK Commercial Brokers Survey, cyber insurance is one of the least traded commercial products by brokers with just under half (49.2%) selling cyber policies. This is a small improvement on the 46.4% of brokers who sold cyber policies in 2015.
Brokers must become more confident about the sale of cyber cover, especially given the new and emerging risks in the commercial market. This includes growth in online purchasing, and the continued investment in IT infrastructure within organizations. When it comes to cyber insurance the need for brokered advice is more important now than ever, and customers need to feel confident that brokers know what they’re talking about.
Brokers should be having deeper conversations with clients about the type of risks they face, to help them find the right policy with an adequate level of protection. They also need to better connect with underwriters or other specialist brokers and/or risk management firms, to ensure they are asking clients the right questions.
The cyber insurance market is set to grow significantly in the UK, with more businesses looking to digitize their practices. In turn, this provides brokers with the opportunity to capitalize on the increased need for guidance when businesses purchase cyber cover, thus expanding their commercial books. Just as businesses in an increasingly digital world cannot afford to ignore cyber insurance, neither can brokers.
By Thomas McCourtie, General Insurance Analyst