Cyber insurance demand creates opportunity for agents, brokers

For the first time in five years, more people are taking concrete steps to protect their personal information and data from cyberattacks, according to a recent Chubb study.

While this information is encouraging, the study also shows how much more consumers could do to protect themselves from cybercrime — giving insurance agents and brokers an important opportunity to add value to their client relationships.

According to Chubb’s Fifth Annual Study on Personal Cyber Risk, conducted in 2022, 92% of consumers are concerned about cyber breaches, up from 80% in 2019, and the intensity of their concern is higher than just five years ago (56% vs. 39%). While some of this heightened awareness may be the result of events in the pandemic, people are also more concerned about high-profile ransomware attacks, the threat of large-scale, catastrophic attacks, and the impact of internet-connected devices. The good news behind this awareness is that more consumers are taking steps to protect themselves from cyberattacks. However, the small steps they’re taking may not be enough to fully shield them from the cyber risks they face on a daily basis.

Armed with data from this new survey, agents and brokers can talk openly to their clients and prospects about cyber risk, the actions they can take to prevent cyber events, and how to protect themselves if something happens.

Here are a few important insights from the survey along with ways that agents and brokers can use this information to grow their business in today’s competitive marketplace.

More people are taking action to protect themselves from cyber risk.

For the first time in the history of the Chubb study, the use of cyber risk mitigation techniques has increased. More people are using multi-factor authentication when logging into their online accounts (51%, up from 28% in 2021), more are clearing their browser histories on a regular basis (48%, up from 28% in 2021), and more are using cybersecurity software on their devices (38%, up from 25% in 2021).

While these actions are a good step, they may not be enough to truly protect consumers from the risks of cybercrime. Brokers and agents should use every opportunity to talk to their clients and prospects about ways they can protect themselves from bad actors. Often people don’t understand how easy it is for their identity to be stolen or a cyber event to happen.

But they still struggle with simple risk prevention measures.

Our research showed that even though people are taking some preventive actions, like updating their password on a regular basis, they might not be taking the risks seriously enough or making the extra effort that could provide real protection. While three in four report updating their password for their primary bank account in the last 12 months, 63% get annoyed when they are forced to update their passwords. Half of those surveyed still use a pet name or other identifiable name in their passwords and 61% say they have trouble keeping track of their passwords.

As a trusted advisor, agents and brokers can use this information to establish rapport with clients and talk to them about simple ways to alleviate the hassle of changing and establishing secure passwords, like using a password protection app.

Successful individuals and families are targets of cyberattack involving money.

According to the study, nearly 30% of high-net-worth Americans and Canadians reported falling victim to a cyberattack involving money. That’s twice the average for all income groups and seven times the frequency reported by those in the middle-income segment. In addition, compared to other income groups, wealthy families are twice as likely to have had their personal information breached in the last 12 months, four times more likely than the middle-income segment. The wealthy are twice as likely as the middle-income segment to have fraudulent charges made on their credit cards.

By using statistics like these, agents and brokers can drive home the need for strict cybersecurity measures and personal cyber insurance. Because the threat to successful individuals and families is so high compared to other market segments, a greater understanding of the risks and mitigation tools is essential.

Personal cyber insurance is becoming more common.

While preventive measures are a great way to reduce the risk of a cyber event, sometimes things happen, and consumers fall victim to a cybercrime. Cyber insurance is one of the best ways to protect against the impact of cybercrime. The good news is, 39% of the survey respondents currently have a personal cyber insurance policy, and that percentage increases greatly with household income. In fact, 83% of high net worth report having a cyber policy. However, there is still work to be done. With 39% saying they are unfamiliar with personal cyber insurance, including 19% saying they are not at all familiar with this type of policy, agents and brokers should still focus on building awareness of cyber risks and the protections a personal cyber policy can provide.

Include personal cyber insurance as part of the whole insurance package.

Just like agents and brokers talk to their clients about including excess liability insurance as part of their overall package, personal cyber insurance should also be part of that discussion. While some cyber-related protection may be offered through a homeowner’s policy, such as identity fraud expenses and replacement of electronic devices and software as the result of harmful code or a computer virus, a separate personal cyber policy should be included as well to increase the level of protection.

Read more: What shape will cyber risks take in 2023?

As successful individuals and families become more aware of cyber risks, they may be more open to discussions about personal cyber insurance. Agents and brokers should take every opportunity to educate their clients and ensure that they have the right amount of coverage to protect them against current and emerging cyber risks.

Click here to learn more about cyber protection from Chubb.

Mary Parsons (mparsons@chubb.com) is executive vice president and Sales & Distribution Leader at Chubb Personal Risk Services.