Cyber insurance can be confusing. It’s a relatively new product here in Australia, and only recently has it become more affordable for SMEs. So, it’s more important than ever to help you better understand how it works.
We’ve created a series of articles especially for brokers that break down the what, why and how of cyber insurance. We showcase how easy, accessible and affordable this cover can be.
What exactly is cyber insurance?
Cyber insurance covers financial losses resulting from cyber incidents, such as funds transfer fraud, data breaches and ransomware attacks.
While the cyber incidents that hit the headlines often involve large companies, they’re not the only organisations impacted by cyber threats. Nearly all SMEs are exposed to cyber risks in one way or another.
But the chances are, your clients don’t have cyber insurance – yet. In fact, only about 20% of Australian SMEs currently hold cyber insurance.
“Not a lot of businesses fully understand cyber insurance because the damage it covers isn’t tangible,” explains Jenita Wijaya, Allianz Commercial Acting General Manager Agencies.
“Like for your home or car, if there’s damage, you can see and feel it. Cyber, on the other hand, is quite intangible.”
But the need for better protection against cyber threats is growing. This provides brokers with a major opportunity to help their clients understand and get the necessary insurance coverage.
Allianz has partnered with Coalition, a global pioneer in cyber insurance
Coalition offers Active Insurance: coverage designed to prevent digital risk before it strikes. Active Insurance combines assessment, protection, response and coverage all in one place.
Active assessment makes the application process simpler – welcome news for busy brokers. “It’s simpler than placing traditional cyber insurance – we only ask around 10 questions,” explains Sam Weaver, General Manager of Coalition’s Australia business.
“Our extensive scanning technology means we have access to 11 trillion pieces of information from over 5 billion devices. This means we already have a snapshot of the risks of any prospective customer.”
“That means there’s less work for the broker,” he points out.
Active Insurance is more than a product, it’s a service
Coalition’s active cyber insurance policy constantly monitors the customer’s risk status, so they can ensure they have the right amount of cover. It also checks that they’re using suitable cyber security measures like multifactor authentication (MFA).
“It’s not a ‘break-glass-in-case-of-emergency’ style policy that sits on the shelf until it’s needed,” explains Sam. “It’s a combination of active assessment, active protection and active response. So [in the case of a cyber incident], our claims and incident response teams can quickly respond to protect against any cyber threats and minimise damage.”
What this means is that the damage resulting from a cyber incident is minimised, fast. That’s vital for businesses of any size, says Jenita.
“Though cyber attacks can damage physical assets, they can also damage brand reputation and trust. This can have an even bigger impact on an SME’s livelihood.”
Cyber insurance is more essential than ever – but simpler than ever, too
Cyber-crime already costs Australians $29 billion each year. In 2023, the Allianz Risk Barometer. found that 45% of businesses worried more about cyber incidents than natural disasters or energy concerns.
“It’s because these days, every company in any field is also, in effect, a technology company,” Sam says. “To make payroll, manage distribution, to manage client relationships – basically, if a company uses email, it needs cyber cover. It’s that simple.”
In recent years, many levels of government and corporate contracts now require suppliers to have cyber insurance. It all points toward the need for good cyber cover, and that can be as simple as placing the right policy.
“Cyber insurance is always evolving – it’s not a ‘set-it-and-forget-it’ type of risk,” says Jenita. “With an active policy from Coalition, brokers can give SMEs the confidence they’re protected.”
“Not just in a claim situation, but in the sense that we can potentially prevent the incident from happening to start with,” she points out. “And that's actually a much better outcome for everyone.”
To learn more about cyber insurance, visit the Coalition website or contact 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.
