Cyber risk presents unique opportunity for brokers, finds report

Insurance brokers are ideally positioned to help companies address problems that are hindering their adoption of cyber insurance and further entrench themselves as trusted advisors, suggests a new report by cyber risk analytics specialist CyberCube.

The report finds that brokers have a critical role to play in addressing adequate coverage and a range of other factors holding back growth in the cyber insurance market. At the same time, they are also uniquely positioned to bridge the gap by leveraging their relationships with insurance carrier partners to deliver new, customised solutions to address both existing and emerging risks associated with cyber exposure.

The report highlights several challenges the market faces in growing adoption of cyber insurance, such as the speed with which cyber insurance wordings evolve and the perception that cyber is a “small-ticket item” unworthy of too much of a risk manager’s time and effort, as well as a lack of collaborative thinking between organisations’ risk management and information security functions.

Despite these barriers many broking firms have proven that these challenges present opportunities for brokers to add a new layer of value-added service, according to CyberCube.

"Brokers can help clients understand how more technical categories of cyber exposure map to insurable losses, and what steps a company can take to mitigate or transfer exposure for these risks. Brokers can also leverage their relationships with insurance carriers to deliver new, fit-for-purpose solutions to address both existing and emerging cyber risks," it noted.

John Anderson, CyberCube’s client services manager, said: “Cyber risk presents a unique opportunity for brokers to further entrench themselves as trusted advisors, helping corporations navigate the complexities of this risk and successfully insure it. Marrying their understanding of insurable cyber risk with their business relationships and expertise in policy wording, brokers can seize this opportunity to grow the cyber market, while carving out an indispensable role for themselves.”