If you’re a broker working with SMEs, cyber insurance may feel like a difficult product to talk about. Unlike other kinds of insurance, it covers mostly intangible assets so it’s easy for SMEs to overlook.
However, as we explored in What every broker needs to know about cyber insurance, businesses need cyber cover now more than ever.
This article provides tips to help you explain cyber cover to your customers and make sure they have the right policy in place.
Tip 1. To explain the need for cover, use statistics and analogies
Many SMEs assume that they aren’t at risk of cyber-crime or data breaches. This couldn’t be further from the truth. Even the most basic technologies can expose a business to cyber risk.
“Simply put, if you have an email address, you can probably benefit from cyber insurance,” explains Sam Weaver, General Manager of Coalition’s Australian business.
“While many of our clients don’t even have websites, they still need cyber insurance. This is because they’re exposed in other ways, for example, through social engineering schemes targeting email. In fact, our US team found that more than half of all cyber claims in 2023 originated in the inbox.”
The US-based Verizon Data Breach Investigations Report showed that 61% of SME businesses experienced cyber attacks in 2021 alone. The effects can be devastating – with many SMEs closing permanently within six months of a cyber attack.
Trent Nihill, Coalition’s Head of Underwriting for Australia, believes analogies can be a useful tool. Especially if SMEs assume they don’t need cyber cover because they already have anti-virus software in place.
“Break it back down to make it equivalent to another policy like property insurance. You wouldn’t go without property insurance even if you have safety measures in place like fire alarms and sprinklers.”
Tip 2. Outline the benefits of active cyber protection
Allianz offers cyber cover in partnership with Coalition known as Active Insurance. It’s coverage that is designed to help prevent digital risk before it strikes.
“This means it’s more than a policy – it’s a real-time, 24/7 service,” points out Trent. “You can call us during the incident, and we can help prevent it from becoming a bigger issue.”
“Our team handles cyber issues in real time, whether it’s from an IT forensics perspective, a crisis management perspective, or a legal perspective. So, if cyber damage does happen, we can help with handling the whole thing.”
Tip 3. Understand how quick and easy it is to place a policy
It’s easy and quick to take out an active cyber insurance policy. Sixty per cent of applications generate bindable quotes within 4 minutes1. The rest will take up to one business day to finalise.
“We ask about 10 basic questions,” explains Trent. “Things like, do you have multifactor authentication? Do you take regular backups? Do you validate payments when sent to someone outside of the company? That’s where the broker comes in – getting the SMEs answers to those questions.”
It’s that simple, and Coalition does the rest. “We have access to 11 trillion pieces of information from over 5 billion devices. Which means we already have a snapshot of the digital risks of any prospective customer,” explains Sam.
As part of the application process, we assess the customer’s cyber security before providing a policy. “If we find a vulnerability, we’ll always explain how to minimise it, and generate a detailed report in less than five minutes,” says Trent.
1 Coalition Claims report 2023
Tip 4. The affordability of cyber cover may be surprising
Given current economic conditions, knowing how to explain the value of cyber insurance to a customer who may be under financial stress is crucial.
It’s simple, explains Trent. Cyber insurance costs have changed over the last five years, but have recently become more affordable. “It’s not nearly as expensive as it used to be. We offer limits as low as $25,000, which obviously helps to keep the premium down.”
“For an SME, the difference between having $100,000 of cover and no insurance can be the difference between staying afloat and going bankrupt.”
“A little cyber cover can go a long way and is always better than having no insurance all together,” he explains.
To learn more about cyber insurance, visit the Coalition website or speak to your Allianz Representative.
*Insurance cover is issued by Coalition Insurance Solutions Pty Ltd (“CIS AU”) (ABN 33 657 140 791, AFSL 539846) under a binding authority given by Allianz Australia Insurance Limited (ABN 15 000 122 850, AFSL 234708) (Insurer). This information is of a general nature only and does not take into account any person's particular circumstances. All descriptions of coverage are subject to the terms, conditions, and exclusions of the individual policy. Before making a decision (or advising your client), please refer to the relevant policy wording available here or by contacting your broker. CIS AU may receive compensation from an insurer or other intermediary in connection with the sale of insurance cover. See Disclaimers. Copyright © 2024. All rights reserved. Coalition and the Coalition logo are trademarks of Coalition, Inc.
This article has been prepared by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL 234708 (“Allianz”). Information contained in this article is accurate as at 3 September 2024 and may be subject to change. In some cases, information has been provided to us by third parties and while that information is believed to be accurate and reliable, its accuracy is not guaranteed in any way. Any opinions expressed constitute our views at the time of issue and are subject to change. Neither Allianz, nor its employees or directors give any warranty of accuracy or accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in this article.
