It doesn’t seem long since our tips on navigating a hardening market, but the cyber insurance world moves fast, and we find ourselves at a different stage of the cycle. An abundance of options and pricing disparities can make softening markets just as tricky to navigate, but there are important points to bear in mind:
1. Look Beyond the Deal
In softer market conditions the headline numbers often become the focal point, but it is important to pay close attention to the policy cover and, more importantly, the quality of response that sits behind the product.
Cover and the incident response services merit deeper analysis and remain the most important factor in the purchasing decision, regardless of market conditions.
Accessing Cyber Insurance and importance of incident response
2. Longer-term Sustainable Outcomes
The Cyber Insurance market cycle appears to be shorter and more volatile than other product lines.
A well-established, experienced provider can often be viewed more favourably, particularly with the ability to offer stable pricing over a prolonged period with a longer-term outlook.
3. ‘Bells and Whistles’
Increased competition often encourages product enhancements as insurers look to differentiate themselves.
Whilst these can provide some useful additional cover, they shouldn’t take the emphasis away from the important question – what actually happens when a cyber event occurs?
All insurers should be willing to articulate how their product manages a cyber event. The ‘Golden Hour’ demonstrates the crucial role the cyber insurance product plays.
The Golden Hour of Incident Response
4. Accessible Expertise
Low touch, streamlined methods are helping insurers get their products to market. This facilitates easier placement and can aid conversion for new buyers, particularly in the SME sector.
However, it does mean that interaction is reduced, and accessible expertise can sometimes be harder to find.
Access to experienced brokers, underwriters and incident response providers remains vitally important, particularly for larger or more complex risks.
5. Differentiate from One-Size-Fits-All
Softer market conditions can lead to changes in insurer approaches with reduced underwriter interaction, shorter question-sets and a decrease in subjectivities. This can create a one-size-fits-all approach.
This sounds positive for buyers, but the main beneficiaries tend to be poorer risks with limited, basic controls that slip through the underwriting process. Moreover, risks with better cyber security posture lose the opportunity to differentiate their risk and demonstrate their quality.
