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CYBERCRIME: CAN INSURANCE HELP TO PROTECT YOUR CLIENTS’ ASSETS?

05/09/2019

Jessie Dhaliwal, Business Development Manager at Azur

 

Over the next decade, cybercrime will become one the most prominent threats to almost every person in the world with internet access. Already it’s estimated that a hacker attacks, on average, just over every thirty seconds, a rate that led to around 978 million consumers falling victim to cybercrime in 2017.

Moreover, with the total cost of cybercrime set to continue growing from a cost of $600bn last year to potentially trillions during the 2020s, ensuring that your clients have insurance in place to protect their assets against this growing threat is paramount.

Protection from connection

Jessie Dhaliwal

As our lives have become increasingly intertwined with connected devices, opportunities for hackers to exploit vulnerabilities have opened up enormously. In just four years, it’s predicted that the average UK household will contain as many as 50 different connected devices. This means that, for homeowners, keeping track of all these devices and making sure they are all sufficiently protected will become increasingly harder.

All of these individuals need to be aware that a virus on a single phone, or other mobile device, can spread to other appliances in an instant, without the owner even realising it. Being hacked in this way can lead to personal information being taken, bank accounts being drained of money, or even blackmail, causing potential long-term financial, emotion, and psychological harm.

The good news, however, is that insurance can often help to cover many of the losses that result from a cyber-attack, giving peace of mind to clients who may be affected by this kind of activity. With cybercrime on the rise and hackers having access to more advanced technology than ever before, brokers are likely to find that the need for this sort of insurance will increase dramatically in the next decade.

Getting in the know
Despite the serious risk that cybercrime poses, awareness of how to combat it is still quite limited, with 46% of respondents in a 2019 Ipsos Mori survey agreeing that information about how to be secure online is confusing. Moreover, the survey also found that only 15% of respondents knew a great deal about how to protect themselves online, despite 80% of respondents believing cyber security was a high priority.

As public awareness in this area grows, however, insurance brokers will have a perfect opportunity to provide expert advice and explain how cyber insurance can help clients to protect themselves in case the worst should happen. So far, the insurance industry has yet to realise the full potential of this type of cover, but as new threats emerge, it’s likely that customer demand in this area will increase significantly, particularly from high-net-worth (NHW) individuals.

Fortunately, brokers have access to all the skills and tools they need to be at the forefront of the fight against cybercrime. For example, they can arrange paid-for advice meetings to make sure HNW clients are aware of the risks involved and can also check whether their current security measures provide sufficient protection against the serious damage that can be caused by a cyberattack.

If a broker finds that an HNW client’s security measures are inadequate, which is likely to be the case for many, given the rapid rate that technology is advancing, they can then step in. In particular, brokers can help find the right insurance policy for each person’s specific needs, advising clients on the best HNW insurer to go to for this type of cover. Some personal cyber insurance policies now make it possible to file claims for fees associated with identity theft, extortion costs, data restoration expenses, as well as the repair and replacement of devices.

In some cases, personal cyber cover can even be automatically included as part of a wider home insurance policy, which can protect clients against threats such as cyber fraud, cyber bullying and cyber phishing. This is a convenient option for clients who want all their home coverage in one place, and who would feel safer with that additional layer of protection.

A growing threat
While cybercrime is already a serious threat that should be covered by insurance, over the next 10 years we’ll see attacks on consumers escalate. The more that clients interact with technology, the more areas there will be for hackers to infiltrate and cause damage, adding to the tens of millions of people around the world affected by it.

With the majority of Britain unsure how to secure the right protection, brokers must take up the mantle and be more vocal about the support they can provide in this area. By helping clients to understand the risks posed by cybercrime, as well as how to insure effectively against them, brokers can help them reduce the impact of an attack considerably.

 

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