Emma Drouineau is a Sales Associate at CyberCube in London. Her role consists of helping broker partners to become knowledgeable cyber risk advisors for their clients by leveraging CyberCube’s cyber risk analytics. She outlines some of the key concerns of brokers in the growing cyber market.
Why are brokers entering the cyber market?
The cyber insurance market is one of the most promising growth markets in insurance today and it is a great opportunity for brokers to grow their business. Looking at the next five years, the market is projected to grow at a Compound Annual Growth Rate (CAGR) of 25.3%. Today though, still a small percentage of potential insurance buyers have cover — but the reality is that a lot more, if not all of them, need it.
In this context, brokers can play a fundamental role in the cyber insurance market’s growth by reinforcing their understanding of insurable cyber risk and delivering value-added services to their clients.
What are cyber brokers’ key pain points?
It is important for brokers to be in a position of knowledge to help companies understand not only their cyber risk, but also how various categories of cyber exposure map to coverages and policy terms, and what steps clients can take to mitigate or transfer exposure for these risks.
Educating clients is even more crucial when we know that a lot of businesses don’t have adequate cyber coverage to meet their true exposure or don’t see the value of cyber insurance today — especially smaller businesses that have limited resources and think they are too small to be concerned. The cyber market will continue to evolve as threat actors change over time, making it challenging for brokers to access the right information quickly, assess their clients’ unique risks, and make confident limits and coverage recommendations.
On the other end, the increased underwriting scrutiny and reinforced focus on risk controls are placing significant pressure on brokers to achieve successful placement outcomes for their clients. This requires them to demonstrate a deep understanding of cyber risk management and take a proactive approach when it comes to helping clients identify issues that need to be addressed before underwriters do.
How are brokers addressing these concerns?
There is a great need among the broker community for tools that can provide clients with the most pertinent information on their financial exposure and on other factors influencing limit purchase decisions. Increasingly, brokers are adopting a data-driven approach by adding cyber risk modeling to their client-facing strategy. By arming their teams with data-driven insights, brokers can make sure they have an accurate view of the risk their clients are facing.
At CyberCube, our goal is to empower our broker partners to have informed communications with their clients. In particular, they find our cyber risk analytics platform, Broking Manager, to be effective during risk transfer discussions. By combining multiple data sources from the cyber security and insurance sectors, Broking Manager provides access to key information on a client’s cyber risk profile, with very limited input required from the broker and their client.
What key features should they be looking for from our model?
It is critical for brokers to be able to communicate cyber risk holistically. Not only do clients need to understand what their cyber vulnerabilities are, but they also want to have a good idea of what their financial exposure looks like should a cyber event happen.
A modeling solution like Broking Manager provides a holistic view of inherent financial exposure to cyber risk that can be further augmented by company-specific risk attributes. Our broker partners use it to calculate a range of potential loss outcomes across a variety of incident scenarios. They will then compare their client’s risk transfer strategy against that of their peers to facilitate limit purchase decisions.
On the insurability side, another recent feature that the tool provides is the ability to indicate security vulnerabilities that should be addressed prior to approaching an underwriter, allowing brokers to set expectations for clients as well as smoothing the path to insurability.
All of this information is delivered in a clean and concise manner, helping insurance buyers understand what kind of insurance they need, how much they need to buy and why.
Check out our blog to find out how Broking Manager can accelerate client engagements and equip brokers with the appropriate knowledge to effectively communicate cyber risk to clients.
