February 16, 2021 by Adam Malik
Although it will take some time, selling personal cyber insurance will come as naturally to brokers as selling home and auto insurance to customers, an expert predicts.
Until that happens, however, it’s up to brokers to make sure that personal cyber coverage is part of the conversation when clients are looking to renew their other items.
“Because the risk is so prevalent — it can be so damaging — we think it’s important that insurance agents are having these conversations with their clients as they’re talking about all their other risk management tools,” said Bill Gatewood, national personal insurance practice leader at Burns & Wilcox.
After speaking to customers about how to protect their homes and vehicles, and after making sure they have enough liability coverage for a lawsuit or a collision, the conversation should then turn to how they’re doing to protect the client’s digital risk.
“It’s just a natural conversation for insurance agents and brokers to have. This is just another form of risk management,” Gatewood said.
Cyber insurance will eventually become a routine part of the conversation, Gatewood predicted. But it will be up to the industry to make sure people are aware of the option.
“I do believe that in the not-too-distant future, people will be buying personal cyber insurance the same way they buy insurance for their homes and their autos and their boats and everything else,” Gatewood told Canadian Underwriter. “So I really think the insurance community has to start creating that awareness.”
Clients may not see the value in it at first; hence, the need to market the product to develop understanding.
“Nobody wants to spend money frivolously when it comes to something as boring as insurance,” Gatewood said. “So they’ve got to be convinced that there’s value to it. I have all faith in the world that agents and brokers who sell personal insurance can create that awareness. And often, you’ve just got to see more and more of these examples of people hacking in through home laptops and talking to kids directly, coming through all the monitoring devices.”
However, unlike home and auto insurance, personal cyber will require a little bit of effort to make sure clients are digitally safe. Being a cyber victim is different than being in a car crash — there’s no big bang to alert you that something has happened.
“The key to the whole thing when it comes to cyber protection is finding out that it’s happening, not finding out that it already happened,” Gatewood said. “And so it really involves a monitoring service to go along with it. These crimes can go on for a long time before people even realize that it happened.”
An insurer can’t respond until there’s a claim, and the client may not even know there’s a loss taking place. “You see the disconnect there?” Gatewood said. “I’ve always felt that that monitoring people’s personal data is really key to this whole thing.”
So personal cyber requires what Gatewood called “active participation,” which means the client will need to check things like credit reports and monitor for any alerts that may come up to signal something bad is happening.
Feature image by iStock.com/blackdovfx