Unlocking the future of cyber insurance: strategies for small businesses and personal lines

The point of least resistance is all of us, says Matt Cullina (pictured), head of global cyber insurance at TransUnion.

Speaking at Intelligent Insurer’s exclusive one-day event “The Underwriting Network: London 2024”, Cullina told the audience how TransUnion’s Cyberscout brand had been a “quiet, behind the scenes player” in the personal lines space for over 20 years.

“For the last 20 years, we’ve been working with your average property and casualty insurance, helping them augment their core policies with cyber,” he said. 

Cyberscout’s aim is to capture the part of the market Cullina described as “the underserved world”. 

Describing the rapid evolution of cyber risk, especially for small businesses and personal lines, Cullina wants to offer a new vision for cyber insurance.

He told the audience there was a need to “get cyber out to the masses”.

Cullina continued: “It may go against your underwriting paradigms, but what we see is that the more you can respond to this ubiquitous risk with ubiquitous coverage and ubiquitous solutions, the better off we’re all going to be in the ecosystem.

“This risk has run rampant over the last few years, especially since the COVID-19 pandemic,” Cullina explained.

“It’s become a human problem. This isn’t a technology problem any more—the point of least resistance is all of us. And the hackers know that these hacking solutions are now franchised.”

Cullina noted the sophistication of a more recent style of cyber attack: “We’re seeing social engineering claims at an all-time high now, and they run the gamut.

“They’re getting trickier and trickier: they’re looking at how you do business every day, whether it’s a family or a small business, and that impersonation is extremely sophisticated and very hard to decipher.”

 Offering cyber insurance successfully

Cullina discussed the importance of offering tailored cyber insurance to small businesses and individuals. “If you reverse the risk to say: how would we all stand up and provide solutions that respond?” he said. 

“Threat actors have upped their game. What is the insurance market doing about it?”

He pointed out the market’s growth potential. “We see millions and millions of policies that are now providing small amounts of cyber to businesses and families, and it’s under-represented in these numbers.”

“We’ve seen a real invigoration in engagement with brokers and agents.” Matt Cullina, TransUnion

Risk awareness and management

Cullina noted the increasing awareness of cyber risks among consumers. “The average person is getting smarter about understanding these risks, so they understand the intricacies between the different issues, and what they’re more worried about.”

He emphasised the trust consumers placed in insurers. “Eighty-seven percent of survey respondents trust insurers. They trust them with their data.

“Even if you’re not offering cyber insurance, they’re coming to you when they have a situation, second only to their bank,” he added. 

Effective crisis management is the only way forward, Cullina says. 

“We find that a quick response can solve the problem or remediate the situation, and also mitigates the loss, exposure, or the opening of a claim.”

New cyber products

Cullina stressed the pivotal role of the chief underwriting officer in developing and marketing new cyber insurance products, as well as educating brokers and agents.

“We’ve seen a real invigoration in engagement with brokers and agents around these added cyber risk offerings,” he said. 

“They’re making sure that the agents feel comfortable talking about this, and that they have a handful of risk management strategies, case studies, claim scenarios to talk about.”

Finally, the importance of continuous innovation and education was addressed. “We do a lot of workshopping with insurers, and there are no standards in this market,” Cullina said. 

“There are all sorts of different solutions out there, and at least they’re giving it a go to see what would be the right fit.”

By understanding the threat environment, offering tailored solutions, educating consumers, and supporting brokers, insurers can effectively mitigate cyber risks and capitalise on new opportunities. 

“For insurance companies, this is a new area of protection for their customers,” Cullina concluded. 

“The reinsurance markets are really stepping up. A variety of solutions are out there for you, and there’s a way to take these corporate risk solutions and bring them down to the masses.”

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