Cyber insurance: Reducing premiums with best practice
Scott Goodwin, COO and Co-Founder, DigitalXRAID
Cyber insurance has become a huge issue for businesses. Cyberattacks continue to increase year-on-year, with criminals identifying new ways of exploiting an organisation and breaching its most sensitive data. In fact, in 2022, £4bn was stolen by cybercriminals and fraudsters in the UK – a 63% increase over 2021. It is therefore more important than ever for organisations to obtain insurance to protect against financial ruin in case the worst happens. We’re also seeing cyber insurance becoming a more common requirement as part of the tendering process for new business, as an essential pre-requisite for mergers and acquisitions, and a crucial expectation across the supply chain. In essence, it’s now harder to operate as a business without it.
Yet the precarity of risk transference from organisations to insurance companies in the current cyber and political climate is driving an astronomical rise in insurance premiums. Recent studies found that the average year-on-year cyber cover renewal rates jumped by 70% in March 2022, and the vast majority of organisations face a premium increase of over 20%. In some ways, this dramatic increase in cyber insurance premiums could be argued to be driving better security practices to reduce insurance costs. But it’s crucial businesses understand exactly what they need to do to comply with insurer expectations and defend against criminals.
An evolving market
The cyber insurance market has evolved dramatically in the last few years. As a result of rising premiums, many insurers are seeking to stabilise the market. Cyber insurers have now started to reduce what they cover; Lloyds of London made an announcement that its policies would no longer cover losses resulting from certain nation-state attacks. More recently, multiple firms have announced catastrophe bonds which essentially allow greater coverage for their customers because it transfers risk onto investors and ILS (insurance-linked securities) markets.
Insurers now also recognise that they need to get a clear and reliable understanding of their customer’s risk appetite, which is why many turn to external security consultants. These professionals are supporting insurers with questionnaire modifications in order to gather the most relevant risk data on all their customers, and in turn protect their own business. And the same goes for companies that are insured. It can be a huge challenge for enterprises that don’t necessarily have the technical knowledge in house to understand their risk posture and communicate this with their insurers. Many Managed Security Service Providers (MSSPs) and external security partners will now regularly support their customers with not only achieving a solid foundational cybersecurity, but also working to lower their insurance premiums, joining all discussions with insurers and offering the necessary technical insight.
What do insurers want to know?
To get cyber insurance, a business will typically need to fill-in lengthy questionnaires and join discussions on where their biggest risks lie, where their most sensitive data exists and what the financial consequences of losing that data would be. Which is why it’s helpful for technical, cybersecurity professionals to be involved – either in-house experts for those that have the budget and resource for larger teams, or external security partners who will have a wealth of experience in this area.
As a baseline, the NCSC’s 10 Steps to Cybersecurity should be considered before even approaching an insurer. These guidelines present a good foundation for even small businesses, and without following these steps, insurance becomes impossible to secure. Insurers also put a big emphasis on identity management controls, multi-factor authentication and the encryption of data. While adopting one of these elements alone cannot guarantee the security of an organisation, the depth of defence if all are in place will generate that all important confidence from insurers. Other areas that will likely form the basis of discussions include:
- Incident response and business continuity planning – What playbooks and processes do you have in place in case your network is breached? How familiar is your team with these?
- Security monitoring – Does the security team have the capability to monitor, identify and mitigate attacks, 24/7/365?
- Protection measures – Which tools and controls are in place to stop a cybercriminal if one area fails, e.g., if an employee falls victim to a social engineering attack or clicks on a malicious link?
- Network architecture – What does the network infrastructure look like, where is data stored and how easy it is for threat actors to move laterally once they have breached the system?
Could rising premiums be a good thing?
It is possible that insurance has previously bred complicity, even laziness, of organisation’s cybersecurity. Insurance policies used to be seen as a ‘get out of jail free’ card, with teams relying on their cyber insurance policies as their entire security strategy, rather than engaging more proactive measures. Today, this is certainly not the case. To protect their networks and reduce their risk appetite and therefore premiums, businesses are needing to implement cybersecurity measures such as penetration testing or a Security Operations Centre (SOC), which help to thwart the risk of cyberattack. In this way, rising premiums could be seen as a positive move that will encourage better security.
The challenging world of cybercrime demands more proactive security from organisations. This doesn’t have to break the bank – by outsourcing a SOC, security monitoring and advanced threat detection are possible at a fraction of the cost of building the same capability in-house. With purse strings tightening ahead of a predicted recession, businesses need to improve their security posture efficiently and effectively in order to reduce the cost of insurance and better protect their data, their teams and their customers.
Efficient Ways Construction Firms Can Bring Down Costs In 2023
Consistent, high-quality construction projects being underway is often a sign of a thriving economy. The future of the US is assured when new infrastructure and homes are under constant development.
As has been well-documented already, construction isn’t as productive as it could be in the US today. Numerous factors are causing these types of projects to be stalled and subsequent price hikes to occur. Economic and sector-wide conditions could be far better.
That said, it’s important for construction firms to feel like they have some say in their future. While things aren’t ideal, there’s plenty these entities can be doing that can bring down costs for the remainder of the year.
We’re a good way into 2023 now, but bringing down costs is not work that can be postponed to 2024. So, here are some efficient ways construction firms can do just that in 2023.
Review Fleet Logistics
It might seem like a curious place to start, but it’s a good idea to review how you utilize your fleet if you have one. The operational costs can sometimes be underestimated, and mismanagement in this area can be more costly today for firms in any sector.
Some companies bring their fleet management costs down by optimizing the routes they travel. Others will run tighter maintenance programs to avoid damaging repair costs in future. Some firms will rent out their vehicles, too, rather than purchasing them outright. Drivers may be subject to refresher training courses, ensuring they adhere to their employer’s money-saving policies.
Then there’s the matter of going green, which more companies are turning their attention to. For example, PepsiCo Vice President, Mike O’Connell, stated at the end of last year that, despite hefty costs around the infrastructural changes, his company believed that “the operating costs over time will pay back” to make the arrangement worthwhile in the long run. That sentiment applies to construction firms as well.
There’s also fleet management software to consider. These digital tools can be encrypted on a cloud server and give all users insights into things like fuel usage, the condition of the cars, and the routes travelled. More intricate oversights can be gleaned from fleet usage, and associated costs can be tallied up instantly. Consequently, construction firms would do well to get that installed.
Install Management Software for Construction
Sticking with software ideas for a while longer, construction management software can come with an onslaught of cost-saving advantages for a construction firm. It’s a principle similar to fleet management software in that more detailed real-time analytics can lead to strategy adjustments.
Cost change management can be streamlined with the use of these tools. Project team communication can also be simplified, which leads to time and money being saved all the more. There’s often a modern and intuitive AI to make these systems operational in days, too, which means construction firms can quickly adapt.
Firms like Kahua are often the obvious choice for these solutions. Their cloud-based project management software in construction has been fine-tuned to be tailored perfectly to a firm’s needs. A flexible approach can be undertaken when utilizing it, and firms can be confident that both their present and future business processes can be more carefully managed.
Create Stronger Supplier Links
Suppliers are the lifeblood of any construction business. It’s possible to work more closely with them.
At the end of 2022, Forbes reported that inflation and supply chain disruptions made getting the necessary construction materials more costly and time and consuming today. Their recommended solutions included rather expected budget control measures, but more notably, fostering stronger supplier relations. That way, construction firms can better understand the factors leading to surging material costs.
It may also be better for construction firms to work with local suppliers where possible. That way, they have a better chance of establishing common ground, supporting the local economy and perhaps having more mutual connections in the industry. Delivery costs can also be slashed along with emissions, which are factors that also contribute to a more robust working relationship.
Outsource Where Possible
Construction firms can depend on more than their suppliers to bring costs down. Further help is available.
Such support is usually accessed via outsourcing. Opportunities to do this may involve:
- Outsourcing waste management – some of these firms may pay closer attention to the potential of recycling and reusing materials, creating further cost savings.
- Outsourcing IT infrastructure – Construction firms have sensitive data they need to protect like any other company and are becoming more digitized like their peers too.
- Outsourcing to off-site construction firms – These entities will design and assemble building components away from the area they’ll be used. They’re often pitted against onsite firms, but both can be required for large-scale development projects.
Outsourcing can reduce costs in the long run, but it isn’t an answer to every struggle. Construction firms must continue doing many things for themselves – even monitoring the weather to ensure potential storms won’t cause hazardous work conditions or delays. That self-starter spirit that often drives construction firms should never be lost.
Top banking trends of 2023 and global outlook of banking and fintech for the year ahead
Author: Professor Marco Mongiello, Pro Vice-Chancellor, The University of Law Business School
You’d be forgiven for assuming that the global outlook for banking and fintech will be dominated by the usual suspects:
Artificial Intelligence – AI plays an increasingly prominent role in banking and fintech by enabling personalised services, fraud detection, predictive analytics, use of chatbots and robo-advisors.
Blockchain and Cryptocurrency – the secure, decentralised and swift system for financial transactions that blockchain has brought to the fore a few years ago, is now becoming ubiquitous. An increasing number of transactions are recorded through blockchains technology, primarily in the cryptocurrency market.
Digital Banking and fintech – accelerated by COVID-19 pandemic, the adoption of digital banking is a trend that will persist as customers have become accustomed to the convenience and efficiency of digital banking. Moreover, fintech enables access to financial services for previously underserved populations in developing countries or less affluent social groups in more affluent societies. This includes mobile banking services, peer-to-peer lending platforms, and microfinance solutions.
Open Banking – another global trend is the use of open APIs (Application Programming Interfaces) that allow third-party developers to build apps to facilitate customers’ access to financial data and services from banks.
Nonetheless, the challenges posed by these rapid changes are reminders that banking, an industry that by its very nature needs to be conservative, risk averse and solid, wobbles on the unchartered grounds of fast and turbulent innovation, where entrepreneurship instead thrives. The underlying rationales of banking and fast digital innovation are not incompatible but do need solid operations and thought-through decision-making to avoid causing catastrophic collapses.
The recent examples of Silicon Valley Bank, Silvergate, FTX and Wirecard are stark reminders that digital entrepreneurship applied to banking doesn’t just bring to customers the visible transformation of valuable new services, but also dents (perhaps as an unexpected consequence) the rationale itself of the role of banks in the global economy. Moreover, the central banks’ ability to contain the effects of single banks’ defaults is no longer a certainty, as experienced just over a decade ago and more recently. The markets’ sentiments are hardly reassured by the commitments of even the most coveted players, such as the European Central Bank, the Federal Reserve, and the President of the United States himself.
Regulators are lagging behind and their attempts to catch up may cause further seismic shocks to the global banking system. For example, another trend that is emerging is one of artificial intelligence decision-centres (i.e., decentralised offices of banks which take autonomous decisions on behalf of investors) outside the most stringent regulatory environments, enabling banks to operate globally more efficiently and more competitively. And we can expect that regulators will close the gap either abruptly, as it is currently happening in China, where private banks are subject to an escalation of regulatory and monitoring restrictions, or more gradually as it is happening in Europe and in the US.
The questions we face, as individual or trade customers of our high street banks, as direct investors or clients of managed funds, are whether banking will become more user-friendly yet, for our daily use but riskier, too, or is it simply becoming more efficient, transparent and also safer.
I’m afraid that the answer is by no means an obvious one. Therefore, caution, level-headed decision- making and critical thinking have never been as important as these days. Whether you are looking after your family savings or growing your pension reserve, the imperative is that you keep updated about the providers of the financial services you rely upon as well as about the general regulations that apply to your financial transactions. This is where, for example, you need to be familiar with your rights in case of cyber fraud, as well as learning how to minimise the risk of becoming a victim thereof. Also, taking additional steps to evaluate the credibility, solidity and reliability of the online provider of that app that was recommended by a trusted friend, may prove a very good move.
Similarly, whether you are the CFO of a medium or large company, or are a sole trader wrestling with your own business’s finances, you need to reflect on what you really want from your bank in the first place. That is before you started to be swayed by the whirlpool of offers of ‘opportunities’ to multiply your financial investments. Chances are that your initial approach to your bank was dictated by either a need for financing your working capital, as per your budget and strategic plans, or to find a safe place for your temporarily idle liquidity. Perhaps you were also after some basic treasury services such as swift payments and debt collection. Maybe some other financial services closely related to your business operations, e.g. factoring. The advice is to give very careful consideration to services that are more remote from your business, because the trend for the next years is that more and more of those will be offered to you. But many new services will disappoint those who, sadly, cannot afford financial mishaps as they look to run and grow their business.
Efficient Ways Construction Firms Can Bring Down Costs In 2023
Consistent, high-quality construction projects being underway is often a sign of a thriving economy. The future of the US is...
How to identify the signs that your IT department need restructuring
Eric Lefebvre, Chief Technology Officer at Sovos For firms to execute transformations and meet their overall vision, it is...
Top banking trends of 2023 and global outlook of banking and fintech for the year ahead
Author: Professor Marco Mongiello, Pro Vice-Chancellor, The University of Law Business School You’d be forgiven for assuming that the...
Sustainable transformation in the energy sector: econnext AG focuses on scale-ups
Scale-ups rather than start-ups: scaling market-ready technologies and companies for a sustainable transformation of the energy and technology sectors Profitable...
Budgeting the unknown, forecasting the uncertain
Tarka Duhalde, Vice President, Financial Controller, IRIS Software Group Volatility and uncertainty are still looming large. In late March...
Building resilience: How to create stability during uncertain times.
Jim Wilkinson, CEO of Zuto We live in uncertain times. Businesses have faced one challenge after another, and we’ve...
The need for simpler cross-border payments must be a priority for all banks
Mushegh Tovmasyan – Founder of Zenus Bank Despite the transformative changes we have seen in the banking sector over...
How app usage can help brands increase their online revenues and customer retention
Arunabh Madhur, Regional VP & Head Business EMEA at SHAREit Group Brands are continuing to invest heavily in the...
Will ‘Britcoin’ change the way we bank?
The Treasury and Bank of England recently announced a state-backed digital pound is likely to be launched in the UK...
In-Store, Online & In-App – Unifying Payment Authentication
Michel Roig, President of Payment and Access, Fingerprints Often, new technologies are lauded as the death of existing ones....
Why the future is phygital
By Eric Megret-Dorne, Head of Card Issuance Services and Service Operations at Giesecke + Devrient Digital banking has become...
Why Keeping Track of Cash Is Key to Economic Survival
By Joshua May, Consulting Manager EMEA, BlackLine Finance and Accounting (F&A) has always had a reputation for its calm...
Does the middle market have a financial edge?
Ilija Ugrinic, Commercial Solutions Director at Proactis Companies tend to look up the ladder when searching for ways to...
Hybrid Intelligence – The only way to face the problems of the future
Author: Prof. Dr. Iris Lorscheid, Vice-Rector Research and Professor of Digital Business and Data Science Computer Science at the University...
Consumer demand driving sustainable payments
Jenn Markey, VP Payments & Identity, Entrust Sustainability is a buzzword that seems to be at the forefront of...
Adyen drives conversion uplift with advanced authentication solution
The company’s expanded authentication offering optimizes authorization, security, and end revenue Adyen (AMS: ADYEN), the global financial technology platform...
It’s time for financial institutions to take personalization seriously
David Hetling, Global Marketing Director, Financial Services, RWS Financial institutions will always play a critical role in society, offering...
The Future of Capital Markets: Democratisation of Retail Investing
Nicky Maan, CEO of Spectrum Markets Over the past decades, global capital markets have undergone tremendous changes. There have...
5 Often-Overlooked Investment Options To Consider Exploring In 2023
When choosing what to invest in, many people will initially focus on the stock market which is considered a more...
New Open Banking platform Archie waves a timely hello to Britain’s beleaguered businesses
Archie is a game-changing payments and data platform that’s inherently human in its approach; a refreshing proposition in the jargon-heavy...