The majority of data on privacy breaches is focused on large corporate organisations (from USD 500 million to USD 1 billion and above). This creates a challenge for developing SME or personal lines cyber products, in terms of portfolio management, risk modelling and underwriting. The largest data breaches also influence the figures on average cost per record of breaches and loss ratios. Data breaches are high frequency, low severity; and most data breach events trigger very little cost, or no cost at all (approximately 50% of the breach events).
Differences exist in coverage needs between the smaller players or personal lines compared to the large corporates. Many mutual insurers are focused on developing personal cyber solutions which attach to a home or personal property insurance product as small commercial. There is a real opportunity for mutuals to create products which are easy to understand and have the right level of cover for their policyholders.
An important aspect for the development of the personal and SME cyber market is education. Mutual insurers need to educate both their policyholders and their brokers, who usually do not have experience in selling cyber products. Helping policyholders/brokers understand cyber with smaller offerings will help them determine their own risk and whether they require standalone coverage or an endorsement.
As consumers and businesses continue to use technology, opportunities will arise from an insurance perspective. Cyber exposures are going to evolve and change. Innovative insurers like mutual companies will be able to create opportunities to solve challenges in the business and personal space.
Session panellists:
- Matt Cullina, CEO, CyberScout (USA)
- Samuel Broomer, Executive Vice President and Chief Operating Officer, Berkley Re Solutions (USA)
- Marcus Breese, Head of Insurance Innovation & Strategy, Corax (UK)
- Jess Fung, ‎Executive Vice-President, Willis Re (USA)
- James Latham, ‎Divisional Director, Willis Re (UK) moderator
