More targeted sector examples showcasing the risks of cyber attacks could improve the uptake of cyber insurance, says panellist

The promotion of and focus on cyber insurance is ”not where it should be” within the sector, according to an insurer speaking at Insurance Times’ exclusive, annual Broker CEO Forum, held on 13 October 2022.

During the event – which was hosted under Chatham House rules at Lainston House, Winchester – the insurer said: “There’s a lack of education and there’s a lack of understanding in the market on what cyber cover is there for, what protection you get and specialisms you will get as a service.”

The insurer representative explained that he saw the low uptake of cyber insurance amongst clients as similar to the initial uptake of directors’ and officers’ cover, which “took a while to come off the shelves” as a product.

He added that the low uptake of cyber cover was also being influenced by the lack – or high cost – of reinsurance solutions.

Realistic view

The panellist explained that a key method of increasing the uptake of cyber insurance was making sure that commercial clients knew the risks of not selecting cyber insurance products.

Another speaker, however, said that “the problem with cyber is that everyone’s aware of the risks – they just don’t think something is going to happen to them”.

He added that the solution to this issue still came down to educating clients, but suggested that “insurers can do more to help brokers with that”. For example, insurers can provide ”case study examples of risks specific to the industry you’re working with” because these can help ”bring to life what the real risks are”.

This panellist gave the example of a restaurant chain not being concerned about the cyber risk of an e-commerce site being taken offline. He explained that to convince this type of client about the value of cyber insurance, a targeted risk example should be given, such as the possibility of tills being taken offline by a cyber attack.

“Bringing those risks to life for the client, that’s what is key for making [cyber insurance] more relevant to the business that you’re working with,” he concluded.