Earlier today we were joined by Betty Shepherd, senior VP Cyber Risk at Great American Insurance Group, Paul Guthrie, co-founder and executive VP at Envelop Risk, and Matthew McKenna, president International Sales at SecurityScorecard as we discussed the threat of cybercrime to the insurance industry.
We explored the changing face of cybercrime and how insurers can go about accelerating growth in cybersecurity insurance.
Here’s what we learnt:
Ransomware is the biggest cybersecurity threat right now. Betty Shepherd points out that 10 years ago the threat of ransomware was mostly hypothetical. Now this practice of cyber-extortion is the central cybersecurity threat to businesses. Insurers need to take a step back to examine why breaches are happening, so that excess claims can be prevented and the protective structure can be more robust.
Cybersecurity is a vertical and a horizontal. It would be a mistake to see cybersecurity insurance as a narrow slice of insurance – instead, we should see an emphasis on cybersecurity as a subsector of other verticals. If a hacker bricks a computer, this is not only an issue for cybercrime insurance but also property insurance. As remote work continues to stretch company IT systems and the Internet of Things increasingly automates our homes, cybersecurity policies should be central to personal and commercial insurance.
The risk of cyber-crime is constantly adapting, and so should our defences. Paul Guthrie says that there is a danger that we take a defeatist stance by seeing cybercrime as a faceless, morphing threat. Understanding the problem is key to rationalising it. There are clear steps that insurers can make in cyber education – 90% of corporate attacks are from phishing links, and firms who make their employees aware of this danger can close this gateway to cybercrime.
There is a massive opportunity in SME cybersecurity insurance. Half of SMEs will go out of business six months after a cybersecurity breach. This statistic is stark, but a strong reminder that SMEs are both particularly vulnerable and uniquely undercovered by cybersecurity insurance. By tapping into this market insurers must make the case for cybersecurity insurance as essential cover, while writing policies in clear, concise and jargon-free language.
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Matt Kenyon is a content producer at Insurtech Insights.
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