Advertising feature: Three ways brokers can help clients gain a security advantage when selecting cyber insurance

Many small and medium enterprises (SME) have an ‘it won’t happen to me’ mentality regarding cyber risk. Either they feel they are too small to be a target or that they have enough cybersecurity defences in place to mitigate any threats, creating a more challenging market for brokers selling cyber insurance.

Claims frequency rose 12% in the first half of 2023 compared with the second half of 2022. Coalition saw a particular increase in claims frequency at organisations where security vulnerabilities went undetected or unresolved. Given that SMEs tend to have fewer resources and lower budgets for IT security – and as a result, may not even know they have vulnerabilities in their systems – the risk of a cyber attack is very real.

However, Coalition’s data also shows that when cybersecurity defences and cyber insurance are both part of an SME’s cyber resilience framework, organisations can reduce their risk of experiencing an incident and, therefore, their likelihood of loss.

Brokers are an essential piece of the puzzle of helping organisations lower, or even prevent, cyber risk. They serve as risk advisers, helping to create a security advantage for their clients through partnerships with insurers and MGAs. While there are multitudes of ways brokers can help their clients stay on top of their cyber risk, here are three of the most important ways to help clients select cyber insurance providers that will give them a security advantage.

1. Look for insurance providers with risk management technology that scales

With several new cyber insurance providers entering the UK and traditional insurers improving their cyber products, the market is constantly evolving. There’s also a convergence of technology, security and coverage as more providers move to position their brands in this space. Brokers should look for cyber insurance coverage where security is built in, not bolted on. Protecting policyholders starts by helping them understand where they’re at risk and their overall level of risk.

Cyber risk management technology covers many different areas, and as a broker, it can be challenging to identify the most beneficial option that will meet a client’s needs. Some only provide risk assessment reports when quoting, whereas others are software applications that provide organisations with continuous updates to how their cyber defence posture evolves, including alerts around new or newly exposed security vulnerabilities.

While both are valuable tools for clients, brokers should look for providers whose technology can scale with fast-moving cyber risk. Cyber defence needs change as quickly as cyber risk. Every contingent quote comes with pre-bind access to Coalition Control, the company’s cyber risk management platform that helps companies detect, assess, and mitigate cyber risk. Even before coverage is bound, businesses can access remediation guidance, self-service tools to resolve security findings, and details about their cyber exposures.

Scalable risk management technology, like Coalition Control, helps build a continually growing pool of data into actionable information for the client. Coalition also integrates visibility and loss-control tools directly into the Coalition broker platform so brokers can provide real-time support, help minimise claims, and contribute to a more predictable renewal experience.

That means that between Control and the broker platform, brokers can help their clients monitor critical alerts and share resources to simplify cyber loss control, retain more clients, and reduce claims.

2. Proprietary threat intelligence built for insurance

Maintaining a solid security posture also involves understanding the evolving cyber landscape, but most SMEs don’t have the resources to achieve this. Brokers should look for insurance providers that do more than just skim the headlines for the latest vulnerabilities.

Coalition’s security research team gathers millions of data points from all corners of the web daily to identify emerging cyber threats in near-real time. Then, Coalition combines this threat intelligence with its claims data to alert policyholders to critical exposures most likely to result in losses. This data expertise helps clients identify exposures and prioritise remediation to minimise risk and maximise insurability.

Making good risk management decisions is the best protection from a severe cyber incident, and choosing a cyber insurance provider with a threat intelligence capability can be a massive advantage for your overall security. Threat intelligence experts seek to uncover new and unique security insights. When part of an insurance team, they share their findings to help policyholders keep pace with the rapid changes in the threat landscape.

Cybersecurity is multifaceted, and no single role, background, or skill set trumps another. Diversity is necessary to develop a strong cybersecurity posture.

Tiago Henriques, head of Coalition’s centre of research and innovation, Security Labs

Tiago Henriques, head of Coalition’s centre of research and innovation, Security Labs, says: “Cybersecurity is multifaceted, and no single role, background, or skill set trumps another. Diversity is necessary to develop a strong cybersecurity posture.

“Our Security Labs experts come to Coalition with diverse backgrounds, including the US intelligence community, law enforcement, and top-tier cybersecurity firms (Carbon Black, IBM, Root Inc, Tenable Network Security, Kivu Consulting, SpearTip, and others). Their combined work experience touches on many security disciplines to create a complete picture of the cybersecurity landscape.”

3. Expert support from your insurance provider

While brokers should be risk advisors for their clients, it shouldn’t mean they must be cybersecurity experts. Working with a cyber insurance provider should be a partnership from which a broker can draw support and expertise to advise their clients better.

Choosing a cyber insurance provider with in-house expertise in both cyber coverage and cybersecurity can be a considerable advantage for brokers and pays off with clients by providing better protection from cyber risk and creating stronger relationships.

The goal of creating a security advantage for brokers who aren’t cyber experts is two-fold. First, they need to establish a collaborative partnership to advise on cyber risk and sell and deliver cyber insurance to a client. Second, clients should be able to access self-service tools and insurer-provided support that helps them with cybersecurity concerns and controls directly, allowing the broker to focus on handling the insurance.

For example, Coalition’s dedicated team of in-house security analysts and consultants helps brokers and policyholders resolve contingencies, remediate exposures, and implement security improvements, assisting clients to become more cyber-conscious and insurable.