Authored by NMU
As we move into the third week of Cyber Security Awareness Month, we’re stepping up our efforts to inform and educate brokers with a Cyber Podcast – not just about emerging cyber risks, but how they can better sell cyber cover to their SME clients
As part of our Overcoming Objections Podcast series, we’re picking the brains of NMU’s expert underwriters to discuss key business lines and how brokers can overcome common objections to coverage. Following on from our previous podcast episode which covered cargo insurance objections, our Cyber & Financial Lines Underwriting Manager, Matt Drinkwater, discusses the current state of the cyber market, developing risks and the common objections to coverage.
You can listen to the podcast here or scan the QR code below using your phone camera app.
Which claims’ trends are driving the most cyber enquires?
While the number of ransomware and associated extortion claims has been well reported in the last 18 months, at NMU we have seen a broad spectrum of different incident types. These range from business email breaches as a result of phishing, to denial of service attacks. It’s worth noting that many of the incidents we have seen have taken place in what would traditionally be considered ‘low hazard’ industries – highlighting the growing threat that cyber attacks pose to all businesses.
One area in which we’ve seen significant change is the payment card industry. Data security breaches for this industry were relatively uncommon in the UK until recently, but now appear to be rising. As a result, fines are being levied by payment card brands, alongside mandatory forensic audits, as well as the banks seeking compensation for card reissuance costs and card fraud recoveries.
Perhaps the most common threat that we’re currently seeing continues to be social engineering fraud, with attacks often causing significant financial loss for policyholders. While we are not currently experiencing a specific wide-spread form of attack across our portfolio, there is an undeniable and persistent increase in claims across multiple attack vectors, both in respect of business that we write and for new enquiries.
What do brokers look for in a cyber policy for their clients?
Despite the constantly evolving cyber landscape, brokers and their client’s needs have changed that much over the last year, but it has become increasingly difficult for them to achieve their goals.
First and foremost, we know our brokers and insureds are looking for a quality cyber proposition, with a simple application process, a fair price and excellent breach response – which is where our CyberSafe product comes in. Our solution provides UK businesses with simple, robust cover for cyber liabilities, cybercrime and even includes restorative support from ReSecure.
With the market having changed rapidly over the past 18 months, we’ve also had to adapt our policy in order to deliver a product that’s fit for purpose, by implementing additional questions for certain industry classes that now face increased risk.
Working closely with our brokers, one common concern we hear, is that they find it more difficult to compare cyber products than other insurance lines, with a more consistent approach to cyber policy language, structure and coverage desired. With this in mind for brokers, it’s crucial they develop a good understanding of cyber risks and the developing landscape, in order to ensure the product they select adequately covers their client’s risks.
For more information about CyberSafe Insurance or our e-trade solution, contact your NMU Development underwriter or our cyber team;
Matt Drinkwater, Cyber & Financial Lines Underwriting Manager – 07748 676262
Cliff White, Underwriter – 07971 923108
John Kellett, Underwriter – 07568 432512