Better knowledge, expertise and cyber data needed from risk transfer partners

Insurers and brokers must better share information on cyber risk and losses to help companies manage the threat, say UK participants in our European Risk Frontiers survey. Risk transfer partners also need to develop expertise that brings cyber risk engineering up to the standards of other lines, such as property. The good news is that value-add services delivered alongside cyber policies are welcomed by buyers and helping to reduce exposure. Claire Combes, director of risk and assurance at intu, says the insurance industry has a great deal of knowledge about cyber risk that could be shared with buyers. This would help the development of best practice risk mitigation and allow business to learn from past mistakes, she says. This information, however, is not being made available, Ms Combes explains. “Generally, across all policies, the insurance industry seems reluctant to analyse the data that it has and share it with all businesses, regardless of the sector they work in. There is an opportunity for the wider insurance industry to really support all businesses; by sharing the sort of things that go wrong, allowing businesses to take action and prevent those things happening to them. This should reduce claims and would have an overall economic benefit to all,” says Ms Combes. Head of risk and compliance at fashion retailer Arcadia, Colin Campbell, agrees that insurers sharing real-life incidents would really help clients manage cyber risk. In addition, he would like “real effort to develop longer-term understanding and relationships as opposed to a ‘quick review/large fee’ approach, which may help initially but does not really develop trust and support”. Paul Goulding, director of insurance at Heathrow Airport, wants insurers and brokers to develop their cyber risk engineering capabilities and proper teams of experts. “With property protection, you can rely on a good risk engineer to understand all that is needed about sprinkler systems and similar technical issues, so you don’t seek that advice elsewhere. But that isn’t the situation with cyber currently. There are lots of people offering advice, but knowing how robust that is, is not easy. If insurers and brokers want to get involved in helping organisations understand and manage cyber risk they have got to tool up and employ the right people,” says Mr Goulding. He adds: “A lot of insurers talk about having an expert, well an expert is not enough when it comes to cyber risk because the threat is so broad and moves so quickly. If they are looking for areas to add value this is clearly an opportunity, but insurers must ensure they use trusted experts, and there aren’t many of those around currently. Insurers are not there yet in this area.” Tracey Skinner, director of insurance and risk financing at BT Group, says support services, such as PR assistance, attached to cyber covers are valuable. The fact that these services may now be offered without insurance cover for a fee is an interesting development, she adds. “Some of the insurers have been hinting that they would be happy to offer the services without the cover. This a potentially big development. Organisations would pay a retainer to have a team that would plug themselves into their business when needed. I think this could be very useful for some organisations without any internal cyber expertise,” she says. Julia Graham, Airmic’s deputy CEO and technical director, believes insurers and brokers are doing some great work to help members deal with cyber risk. “Some of the value-add solutions on the back of insurance cover are offering an integrated risk and insurance solution rather than simply an insurance product. These solutions can be embedded with the other operational arrangements of an organisation, including business continuity plans and, as part of these, data breach response plans,” she tells Commercial Risk Europe. “The typical option, to opt for your own preferred advisers with pre-approval from the insurers, with the insurance cover helping pay for that, is a bonus,” she adds.

Better knowledge, expertise and cyber data needed from risk transfer partners

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