Given how quickly the world is becoming more digitally focused, insurance agents must be aware of, and be able to sell, cyber insurance to businesses as the world continues to evolve. Given the fact that more businesses than ever are operating online and incorporating touchless options into their in-person experiences, businesses and the insurance agents who service those accounts both need to be aware of the risks associated with cyber attacks and the best ways to protect themselves.
What is cybersecurity insurance?
New types of attacks continue to emerge, and cybercriminals continue to devise ingenious methods for stealing data, infecting computers with malware, encrypting data with ransomware, and other malicious activities. In this context, insurance agents have an excellent opportunity to learn how to sell cyber insurance to small and medium-sized businesses.
Know How to Become a Cyber Security Insurance Agent?
In terms of prevention, cyber insurance cannot provide the same level of cybersecurity protection that things like anti-malware software can provide. However, when cyberattacks do occur and cause damage, cyber insurance can help to mitigate the consequences by covering the costs that are typically incurred as a result of the attack, such as data recovery expenses, legal liability fees, and lost revenue as a result of the attack.
In Order To Sell Cyber Insurance, Background Is Required
Because cyber insurance is still a relatively new area of insurance, you may want to brush up on your background knowledge before diving too deeply into the details of how to sell cyber insurance policies.
Understand cybersecurity risks and costs, in particular, so that you can speak with potential clients about the need for cyberinsurance. Enrolling in a cybersecurity course online, such as through a platform like Coursera, may be beneficial. Agents will also need to familiarise themselves with the different types of cyber insurance policies available and how they differ from other types of commercial insurance.
What kind of license do you need to sell cyber insurance in your state?
In general, you do not require a special cyber insurance licence to conduct business. The majority of agents who hold a property and casualty license are also able to sell standalone cyber liability policies. Nevertheless, just as with other licencing requirements, the specifics can differ from one jurisdiction to the next and can change over time, so it’s important to check with your state’s insurance regulator. Specific insurance companies may also have their own set of requirements that must be met before you can sell cyber insurance policies on their accounts.
Learning To Sell Cyber Insurance Is A Challenge
It is necessary to learn how to sell cyber insurance after determining what type of license is required. This includes learning the strategies that will be used to close deals once you have determined what type of license you require.
The skills required to sell cyber insurance are not significantly different from those required to sell property insurance or any other type of coverage, in the grand scheme of things. It is the responsibility of insurance agents to identify potential customers, use insurance marketing strategies to engage these customers, and explain how insurance policies can help solve the prospects’ pain points.
Consequently, when it comes to selling cyber insurance, pay attention to areas such as the ones listed below.
Who Is Necessary for Cyber Insurance?
It is likely that the demand for cyber insurance will increase as the world becomes increasingly digital. However, not everyone requires cyber insurance, particularly if the cost of obtaining this coverage outweighs the value of the assets that the company is attempting to protect. Consider the following factors when identifying prospects who are most in need of cyber insurance:
What is the value of a company’s data? It is possible that the cost of data falling into the wrong hands for a company operating in an extremely sensitive industry will be sufficiently high to warrant the purchase of cyber insurance (think doctors, lawyers, accountants). To determine whether or not a company would make a good prospect as you learn how to sell cyber insurance, think about the company’s digital footprint and data value in the same way you would evaluate the property that a business owner might need to protect through cyber insurance.
The company appears to have a good handle on cybersecurity, but how well does it do so? Knowing this information may necessitate conversations with prospects, but once you’ve established a profile of the types of companies to which you can reasonably expect to sell insurance, you can apply that framework to other types of companies as needed. Consider the possibility that businesses in a particular industry that are in the process of scaling up are having difficulty protecting their data as they expand.
What is the role of cyber insurance in mitigating risk?
You must be able to connect cyber insurance with risk in the same way you would with any other type of insurance as you narrow down your list of potential customers when selling cyber insurance. Find out what risks are covered by the various cyber insurance policies that you might want to offer to your clients. Ideally, cyber insurance can assist business owners in addressing risk in a variety of areas, including:
Financial Risk: In general, financial risk is the overarching risk that cyber insurance can help protect against. Despite the fact that cyber insurance cannot prevent a cyberattack, it can assist business owners in avoiding financial ruin as a result of a cyber breach.
In addition to financial risk, cyber insurance can assist business owners in regaining their footing more quickly after a cyber-related incident occurs. In the event of a breach, cyber insurance may be used to cover the costs of data recovery, among other things. As a result, having adequate cyber insurance can help businesses reduce the risk of having to shut down operations for an extended period of time, which can be costly in terms of money and can also be detrimental in terms of customer experience.
Recognizing how cyber insurance might help to reduce reputational risk could be a good selling point for a company whose reputation has been harmed by a cyber breach. When cyber insurance is used to cover the costs of conducting a thorough cybersecurity sweep to identify what has been compromised and notify those who have had their data compromised, rather than simply addressing the problem on the surface, the company may be able to give its stakeholders confidence that the problem has been resolved.
Exactly What Do Business Owners Want to Know About Cyber Liability Coverage?
Insurance agents should not only be able to speak with business owners about the risks that cyber insurance can help them mitigate, but they should also learn what questions business owners have about cyber insurance policies. These can vary depending on factors such as the size of the company and their overall experience with insurance, but in general, potential customers will have questions in areas such as:
- What are the benefits of purchasing cyber insurance as a stand-alone policy?
- What is the cost of cyber insurance in relation to the coverage it provides?
- What are the circumstances that would lead to a claim?
According to a Deloitte study, the most common reasons for middle-market buyers not to purchase standalone cyber insurance are concerns about cost and coverage limits and coverage limits. The majority of businesses also have some form of cyber liability coverage as part of their general commercial insurance policy.
For those looking to increase their cyber insurance sales, being able to explain what a cyber policy entails, how it differs from other policies, and the costs versus benefits can be extremely beneficial in increasing your book of business.