August 21, 2020 by Adam Malik
Brokers and insurers should expect an upswing in cyber insurance demand, if they haven’t seen it already, as the workforce shifts in the wake of the COVID-19 pandemic, a number of reports suggest.
Just over a third (34%) expect to return to the office full-time, while 21% expect to be at home permanently, according to a survey from data and analytics company GlobalData. The remaining 45% expect some sort of mix.
This presents an opportunity for brokers when it comes to selling cyber insurance. That’s because working from home as a result of the COVID-19 pandemic has exposed vulnerabilities when it comes to home network security compared to when working off corporate networks.
“Businesses will rely on advice from third parties when purchasing cyber insurance, as it is a new product that involves more complex risks,” said GlobalData insurance analyst Yasha Kuruvilla. “Brokers that gain expertise here will have an advantage over competitors. However, many brokers have been slow to adapt [to] digital technologies, which will hamper them in an increasingly virtual world.”
Insurers can also use this as an opportunity to grow their penetration rate, says GlobalData. The size of the company usually determines if it has cyber insurance, the company said in a separate report. The biggest uptake in the coverage has come from micro-businesses, growing 300% from 2017-2019. But that still means just under 18% of micro-businesses — those with 1-5 employees — now have cyber insurance, said Jazmin Chong, an analyst with GlobalData.
“This huge increase is due to the very low proportion of micro-businesses that held cyber insurance in the past,” she noted.
Similarly, small and medium businesses are increasingly buying cyber insurance, she added as 40% of small enterprises have a cyber insurance policy. “More than 50% of medium enterprises now hold cyber insurance, highlighting the growing awareness around the importance of protection against cyber incidents among larger-sized businesses.”
These numbers should grow, Chong predicted.
“The pandemic is bound to accelerate the market,” she said. “GlobalData expects a further increase in cyber insurance, not only because of the cyber risks associated with employees working from home, but also because the pandemic has further entrenched companies’ heavy reliance on technology to fulfil day-to-day operations.”
And it seems being cyber secure is now on the radar of employees.
Recent research from cybersecurity firm Trend Micro found that two-thirds of Canadian working from home are now more aware of IT security. Meanwhile, 86% of Canadian respondents to its Head in the Clouds study reported that they believe they have a serious responsibility to keep their organization secure.
However, they’re still engaging in risky behaviour, the report warned. For example, one-in-five Canadians give unsupervised access of their work laptop to others.
That’s a no-no, according to experts speaking at a recent webinar hosted by Canadian Underwriter.
“Your family members should not be using your company-issued device,” said Eduard Goodman, global privacy officer of CyberScout during the webinar, Business Continuity in the Digital Age Part 2: Cybersecurity in a Remote World.
Fellow panellist Philomena Comerford, president and CEO of Baird MacGregor Insurance Brokers LP & Hargraft Schofield LP, agreed. “I have been religious about it, and they have never attempted to touch my devices. That is one of our golden rules because kids are into anything and everything, and next thing you know they will introduce some horrendous malware on to your computer.”
Feature image by iStock.com/erhui1979