Expert calls for household cyber cover

A leading insurance analyst has said the benefits of cyber protection in household policies is at a point where underwriters need to consider including the cover.

Daniel Pearce, General Insurance senior analyst at data and analytics firm GlobalData said the growing dependence on connected devices inside the home had created a demand which now needed to be met.

“Although in its infancy, and largely restricted to the high net worth space as a personal insurance product, the consensus throughout the market appears to be that packaging cyber protection alongside a home insurance policy is the best approach to grow the personal lines market,” he explained.

Pearce added individuals are becoming increasingly connected and reliant upon technology for day-to-day activities, and as such the need for personal cyber protection is growing.

Findings from GlobalData’s 2018 UK Insurance Consumer Survey, said the firm, highlighted that there is still a long way to go before insurers realise the benefits such devices can bring.

Pearce said: “An increase in the number of connected devices will create an opportunity for insurers to incorporate the technology into home insurance as a way to prevent claims from occurring.

“Escape of water claims are a longstanding challenge for the home insurance market. From insurers’ perspective, a water leak detection device would arguably be the most beneficial of the connected devices available. However, only 7.2% of home insurance policy holders have such a device in place.”

Providing cyber insurance that extends cover to connected devices could help increase the uptake of technology amongst consumers.

 “The hope is that such devices will prevent or reduce the severity of claims, in turn allowing insurers to offer lower premiums to individuals who have the technology in place,” explained Pearce.