May 10, 2019 by David Gambrill, Editor-in-Chief
Cyber insurance is no doubt a growth opportunity for brokers in Canada. Insurers are underwriting 10 times the amount of cyber premium that they were just four years ago. And yet, the product appears to be a tough sell.
Brokers seeking to grow their cyber business need to break through the cognitive dissonance of small business owners regarding cyber risk. Borrowed here from psychology, the theory of cognitive dissonance describes the discomfort we all feel when we confront an inconsistency between our various beliefs, attitudes and behaviours.
Say I am the owner of a small bookstore. I believe I am a safe, careful and cautious person. I keep my business anti-virus software up to date, I don’t visit risky websites, and I don’t read or respond to phishing emails that I receive from Nigerian princes or Russian brides.
Along comes an insurance broker who wants to convince me that I am actually a negligent, reckless or imprudent manager because I do not have a cyber policy in place. Without cyber insurance, I am told, I am putting my business in grave peril. I am going to be imminently hacked and I will lose my business.
The idea you are selling to me as a broker is fundamentally inconsistent with my belief that I am a safe, careful and prudent business manager. I may even reject your offer of cyber insurance just to avoid feelings of discomfort I may have about your suggestion that I am not safe, careful and prudent.
How can you break through my cognitive dissonance?
Two options: 1) reduce the importance of the dissonant belief; and 2) add more consonant beliefs that outweigh the dissonant beliefs.
What does this mean in practice, when you are selling cyber insurance?
First, tone down the fear-mongering. Avoid using alarmist cyber breach statistics. This is one way to reduce the importance of the dissonant belief that you are introducing to the client (i.e. that the business is in imminent peril).
Second, assure the small business owner that since they are so careful and prudent, they will definitely want to make sure their business is protected. This is an example of adding more consonant, consistent beliefs.
When selling cyber to small business owners, it’s all about ego. Play up support for your client’s preconceived notions that they are safe, wise and prudent managers.