Cyber coverage – how do you sell it? by Donald Horne
With the decline in revenues from auto insurance, brokers are looking for new revenue streams. Cyber has been hailed as the hot product for 2015, but brokers are asking one simple question: how do you sell it?
“There’s not a whole lot of training out there or anyone who is willing to come in and explain exactly – especially to the younger brokers – what the implications are; what are the exposures, especially to a small-to-medium-sized client” says Melody Mireault, commercial manager for Topping Insurance Brokers Limited in Peterborough, Ont. “And that is where brokers are going to try and sell cyber – to the small-and medium-sized clients.”
The clients are asking what their exposures are, and what a cyber attack could mean to them. For brokers, it is unfamiliar ground – trying to sell a product that they may not fully understand.
“For someone who knows absolutely nothing about it (cyber insurance) – there is nothing that starts at ground zero and explains what the kind of exposures would be,” Mireault told Insurance Business. “If you are a brokerage with a lot of small to medium sized commercial clients, try and sell it; try and sell something like cyber to them.”
Chubb’s Private Company Risk Survey showed that 39 per cent of private companies felt they were adequately insured against cyber liability without additional coverage, with only 5 per cent of private companies currently holding cyber liability insurance.
Mireault agrees that broker associations or the insurer should step up and provide experts or some form of training to help educate brokers on selling cyber insurance.
But the training must be done right, she points out, citing a recent example of a speaker she invited as president of the Peterborough Insurance Brokers Association for a luncheon on the very topic of cyber coverage.
“I had someone come in, and it was a broker from outside of Peterborough who had written an article on the topic, and I asked him to speak at our luncheon – and he was very good. However,” she says, “the comment that was made was that they still didn’t understand it.”
Most of the reaction was that they understood the great promise that cyber liability coverage offers, but that they wanted practical information on how to sell it to their SMB clients.
“I think the problem is – you learn to be an auto underwriter by learning from the ground up. That isn’t happening with this coverage (cyber),” says Mireault. “Companies are saying ‘Oh you should have it,’ but everything you read are examples of big powerhouse companies. And most brokerages have maybe one client like that, or none. That’s where the challenge is.”