The Expert Podcast

…The cyber insurance market is going through a serious transition. The legacy or traditional insurance. industry covered things like you know fire and damage and liability. A theft…Cyber insurance has a little more of an intangible coverage covers. Things that happened. In the technological landscape of a company. For the past a hundred plus years insurance companies. Have based there underwriting sales and even claims adjustment based on…the type of claims that come from a more structural or trend or tangible type of loss, your building is damaged. Now if somebody gets hurt and him. even financial losses are tangible. The cyber insurance. Structure is different And some of those companies are struggling with that transition in the same way. You know electric vehicles are replacing gasoline vehicles and there's a, a little bit of a. struggle there. The insurance industry is facing the same struggle How does that playing out for companies, brokers and even insured clients ? Well what it looks like from the insurance side is that. Insurers who write cyber liability policies. And R specifically or dedicated to that cyber market are well-equipped to handle claims, but carriers and adjusters who are true. type cover coverages. May not have the. Legacy structure that matches the underwriting and claims for example underwriting. Preparing for selling a policy for cyber policy for cyber insurance He needs a lot more research about the insured than a typical. Legacy type policy. legacy policy You look at the industry they're in how big is their company and you put a quote based on the global. Loss rate of that type of industry with that many employees or that much revenue. Cyber policies need more specialized. Introspection on that particular company, because you could have two identical companies, one. With the same amount of employees the same amount of revenue in the same industry they could even be in the same town for that matter one could have a much higher cyber liability risk profile than the other one because of their internal policy So. Writing a monolithic. Rate structure on all. Companies might not be. The best way to go. And even if you did write for lowest common denominator because of. Licensing requirements. You may find that. Your losses might exceed. What's your writing for or. Inadvertently put excess risk on companies that are not following best practices. So how does this play out ? If you're a broker. You may want to look at markets that are specific to cyber policies and for the time being you may want to write stand alone cyber coverage. Because even though there may be some coverages baked into legacy policies, it may not be the easiest to adjust easiest to. to clarify. you know there's a phrase that came out in the seventies called future shock where when things change very quickly, The disruptions create problems Sometimes they create opportunities but they create problems. So…carriers and adjusters who face claims under traditional policies. Silent cyber may not have the same wherewithal to be able to prevent them detect them. And each. mitigate the losses. So it's worth noting that. As a broker even as a customer. Buying a standalone cyber policy not adding it as an endorsement to a standard policy might have some advantages because you might be exposed to a company and a broker who specializes in that type of coverage. So that you're not trying to. Do what's called a houseboat. Right Think about a houseboat. You don't have a very good house You don't have a very good boat. If you're mixing cyber and traditional policy, you may not have good coverage or the best coverage for both. Having them. Distinct and separate at least for the time being until the company's kind of homogenized this type of insurance. I'm liable. understanding. You might want to go with experts who are starting out kind of disrupting the market. Leapfrogging ahead There are some new companies that right Only cyber sometimes. I have a better understanding of that market. They can maybe have lower premiums, better coverages. and even a better understanding of how to write for your business but compare make sure you're not just. doing an insurance decision based on just the fact that the company talks about cyber You want to make sure that they have the ratings that you want They have the coverage that you want. And that you understand what the exclusions are because cyber has a lot of exclusions especially when it comes to you following best practices, you're going to have to abide by the terms and conditions of most policies to make sure that you're doing things like multi-factor authentication. updating patches, making sure all your devices are, logged And, the cyber policy cyber insurance company will give you good suggestions And that the good news is the companies that specialize in cyber. They know that like the back of their hand and there'll be able to guide you accordingly…