Guidewire’s chief innovation officer says that cumulatively, financial scams risk the reputation of the industry 

Software company Guidewire is “hugely supportive” of how the government has moved to extend the draft Online Safety Bill (OSB) to cover financial scams that could cause great hurt and distress following pressure from the insurance industry.

The draft OSB was published on 12 May 2021. It establishes a new regulatory framework for identifying and removing harmful content from the internet, aiming to stop racial hate, keep children safe and protect democracy.

Paul Mang, chief innovation officer at Guidewire Software, told Insurance Times: “The scale of these scams has exploded during the pandemic as cyber criminals have sought to exploit people’s anxieties.”

He believes that financial scams that mimic legitimate financial help poison the good principles of taking out financial protection - this means they “must be stamped out”.

Mang added: “Such scams may appear like small, crude crimes but, cumulatively, they risk the reputation of the industry, ruin customers and harm efforts to make insurance more accessible via digital channels that enable more people to be properly and affordably protected.”

He cited Guidewire’s research last year on UK insurance customers, which revealed a steep spike in interest for seeking out help with job protection that could be exploited by fraudsters who offer fake products and services.

The new framework for the draft OSB includes these changes:

  • New additions to strengthen people’s rights to express themselves freely online, while protecting journalism and democratic political debate in the UK.
  • Further provisions to tackle prolific online scams such as romance fraud, where people are manipulated into sending money to fake identities on dating apps.
  • Social media sites, websites, apps and other services hosting user-generated content or allowing people to talk to others online must remove and limit the spread of illegal and harmful content, such as child sexual abuse, terrorist material and suicide content.
  • Under a new duty of care provision, Ofcom will be given the power to fine companies up to £18m or 10% of their annual global turnover, whichever is higher. It will also have the power to block access to sites.
  • A new criminal offence for senior managers has been included as a deferred power. This could be introduced at a later date if tech firms don’t step up their efforts to improve safety.

More to be done

Mang continued: “There is more that could be done to offer cyber insurance policies that protect ordinary consumers from cyber fraud.

”A great deal of value can be created by the insurance industry if it works with insured customers to identify all the devices that they own, how secure their passwords are and whether they are being shared on the dark web, particularly as the delineation between personal and work devices continues to blur.

”These are the new considerations that insurers are having to deal with and we are helping insurers understand cyber risks more accurately to write effective policies.

“The ease with which criminality can be conducted online, particularly with the anonymising effects of cryptocurrency, mean that this could well be the scourge of the 21st century.

”Insurers are quite rightly engaging with these issues and asking themselves what role they play without simply being spectators.

“Ultimately, the role of general insurance is to figure out how these risks are interconnected and can be properly defined as monetary damage, then mitigate that risk and provide peace of mind for all.

“Society as a whole, and insurers more specifically, needs to recognise that more and more future risks will involve the interconnectedness of digital communications and technology networks.

”The insurance industry is in the business of managing risks and their impact on people’s lives and so it has no choice but to be involved in the digitalisation of risk in the future.”