While this report is geared to commercial risks, with cyber risk management a fledgling topic for private families, we feel this to be a good proxy for family offices and other successful individuals.
Some of the key findings:
- The shift from endorsement to standalone cyber policies continues as insureds seek dedicated limits, higher limits, and expanded coverage, emphasizing the need for a separate cyber insurance market.
- ‘News of cyber-related losses experienced by others’ and experiencing a cyber-related loss’ held onto the top two spots as the main drivers of cyber product sales.
- Buying cyber coverage because it was ‘required by a third party’ moved up from fourth to third place, despite stiff competition from the new category of ‘regulatory changes’.
- There has been a healthy take-up of coverage by SMBs and by less traditional buyer sectors including manufacturing, which together with healthcare and professional services, now lead the table of new-to-market buyers.
- Lack of understanding of exposure and coverage options remain the primary obstacles to selling cyber insurance.
(from Advisen/PartnerRE report, 2019)
privateRISK Analysis of the 2018 Advise/PartnerRE Cyber Survey
Our takeaways from analyzing the report include-
- GDPR remains top-of-mind and most people agree that once a marquee loss or case study emerges we will finally know the depth of the risks here (71% of respondents)
- Cyber insurances remain inconsistent in price and coverage, meaning you must pay special attention to assuring your specific concerns are addressed
- 89% of cyber insurance products are provided to firms of $1B revenues or less–this appears a good proxy for family offices and signals that these size entities are both targets of digital intrusion and would be meaningfully impacted post-loss.
- 75%+ of respondents state that clients do not understand their exposures nor understand the way that insurance products will be a benefit–the marketplace has to do a better job of educating consumers and not simply waiting for more technology-native generations to become decision makers. It will be too late then.
- Cyber business interruption is, unsurprisingly, the most sought after coverage for corporations. Family offices and other successful families would do well to heed this lesson: the financial loss post-breach is not the biggest risk–it is the disruption to your personal and professional lives.
- 77% of respondents stated that “sometimes” their cyber strategy meets their needs–signaling that the industry has a ways to go until people understand, appreciate, and see value in their digital insurance strategy.
Conclusions and Further Reading on Cyber Insurance
While we constantly monitor and analyze the market for private families, there is not a lot of raw data available regarding cyber losses and cyber insurance strategies for families. In fact, the insurance market for consumer cyber insurance is still new and only offered by specialty insurers to the private client space.
If you want to learn more, we suggest the following resources:
- Cyber Liability Guide
- Info on insurers currently offering cyber insurance for private clients:
About the author
Bob
Strategist | Advisor | Thought Leader
Bob Raymond manages risk for many of the country’s preeminent families and family offices. He is an outside director, educator, and the founder of privateRISK.