Why it’s time for insurers to cover cybercrime

Why it’s time for insurers to cover cybercrime

While the pandemic significantly disrupted the global insurance industry, the resulting acceleration in digitisation improved operational efficiency and enhanced client experiences. With online transactions and engagements now the norm, the next challenge is bridging the coverage gap threatening commercial and consumer clients’ security. This article shows it’s a challenge that can easily be turned into a growth opportunity by quickly leveraging established, third-party expertise in cybersecurity.

Interconnected insecurity

A recent report from Deloitte[1] revealed many households have an average of 25 internet-connected devices. That’s 25 portals vulnerable to cybercriminals and fraudsters. Plus, an estimated 45% of full-time employees work from home. Unsurprisingly, 69% of businesses have suffered a cybersecurity incident from teams working remotely,[2] while households experienced 104 cybersecurity threats per month.[3]

Growing awareness

As coverage of security breaches, identity theft, phishing scams, retail fraud, social media account hacking, and malware and ransomware attacks becomes more prominent in the media, businesses and consumers increasingly aware of the dangers are looking for prevention and protection solutions. But where can they find them?

Massive opportunity

TransUnion commissioned a survey of 3,000 consumers in Feb. 2022 and learned almost a third (31%) of respondents would first consider purchasing a cyber solution from their insurance companies, while 38% didn’t know where to get coverage for a cyberattack.

This data revealed two valuable insights for insurers: The level of trust invested in the industry by those seeking protection or coverage from unexpected adverse events, including a cyberattack; and the potential for insurance companies to position differentiated services to address this expanding need.

Both points represent significant opportunities to increase acquisitions in new markets — while investing in meaningful engagement, and relevant upselling and cross-selling of critical solutions to help drive loyalty and improve retention of existing customers.

Overcoming the barrier to entry

Developing, defining and underwriting economically viable and commercially sustainable coverage solutions around cybercrime is out of scope for most insurance companies. However, as more consumers look to insurers for cyber coverage, a lack of in-house expertise doesn’t mean those unable to create such complex products must lose out to competitors that can.

Agile insurers can leverage the expertise of third-party providers with long-established credentials — such as TransUnion CyberScout — to rapidly configure, install and integrate sophisticated custom-label, cyber insurance solutions as part of their coverage offerings.

Few commentators would confidently predict what might impact the insurance industry in 2023. Still, most would agree, organisations that generate growth strategies anchored in their core missions are more likely to succeed than those that don’t. With protection and mitigation as the DNA of any successful insurance company, the inherent dangers of the digital domain could be the next frontier of new product development and revenue generation.

CyberScout can document evidence, notify authorities, liaise with financial service providers, secure accounts, file reports, and assist with changing passwords and filing claims.

Visit CyberScout to learn more about how TransUnion can help you develop a bespoke, co-branded, fully supported, cyber insurance solution for your business — in just 90 days.

[1] Connectivity and Mobile Trends 2021 Survey, Deloitte 2021

[2] Global Security Attitude Survey, CrowdStrike 2021

[3] More Alarming Cybersecurity Stats for 2021!, Forbes 2021