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Cyber Research 2018: Cyber insurers will live and die on claims experience

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  • Brokers judge insurers on their claims process and their approach to risk management
  • Top-ranked insurers utilise a claims process whereby policyholders are directed to incident response experts
  • It is key to directly engage with policyholders when creating risk management solutions
tom spier cyberscout
Tom Spier, director of international business development, Cyberscout

Post’s 2018 Cyber Insurance Survey reveals a critical need in the emerging cyber insurance market: a specialised process to support cyber claims.

In the survey, cyber insurance providers earned low rankings from brokers even when they had invested substantial resources into developing a cyber proposition. The question is: why?

A closer look at the survey response details reveals some patterns.

Insurers with lower rankings faced criticism for both the customer claims process brokers experienced when supporting a claim for a client and their approach to risk management.

It is no coincidence that insurers ranked low for claims experience were either predominantly using a general casualty or even property claims department with no specific cyber expertise, or had outsourced project management responsibilities to a law firm or IT security vendor. While these skills and companies are crucially important in the claims process and add real value to the resolution of events, they do not have the broad-based expertise, or the in-depth project management experience required to create a positive customer experience.

Another trend that was consistent among the low-ranking products was the approach to proactive risk management delivered as part of the proposition. While almost every product on the market provides some form of risk management, too often this comes in the form of tools that must be sought out and engaged with by the policyholders themselves. This creates extra challenges for the broker needlessly.

On the flip side, all of the top-ranked insurers use a claims process whereby policyholders are directed to incident response experts who are on hand to guide them through the process in its entirety. This provides a better customer experience because policyholders have a single point of contact across all aspects of a claim, the interests of the project management experts are directly aligned with those of policyholders, and policyholders are connected to an expert with intimate knowledge of cyber events.

Providing incident response expertise during the claims process also offers benefits to insurers themselves. This means they can avoid costly hourly charge models and the limit of indemnity can be effectively used in fixing the problem rather than for expensive consultancy services.

In the rare event that an incident is not covered under the terms of the policy, customers can still tap the breach response experts for advice on resolving the situation outside of insurance cover, which can even give rise to a positive customer experience when a claim is declined.

It is key to directly engage with policyholders when creating risk management solutions. Having a host of relevant, easy-to-find and easy-to-understand tools is one aspect of that; communication is the other.

Unless insurers have their marketing functions active and can drive education into policyholders, there is no hope of high use or awareness over loss prevention benefits.

Cyber Research 2018: The findings

Cyber has come a long way in the past 70 years, yet its meaning has essentially remained the same: it still encompasses the notions of control and communication. Post, in association with Cyberscout, surveyed the insurance market and consumers to find out how well cyber insurance is working

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