Lack of standardization in cyber insurance policy language and wordings remains a challenge in the industry, experts tell Canadian Underwriter.
“Is it a challenge to sell cyber? I think it is,” says Greg Markell, president and CEO of managing general agent Ridge Canada. “It stems from [the fact that] no two industries are the same, no two businesses are the same, and the lack of standardization across every single cyber insurer and market makes it very difficult for retail brokers.
“But I think the retail community is doing an excellent job, and I think they have done an excellent job,” he says. “They are reacting to what [the market] is putting in front of them…”
However, one cyber expert doesn’t think the industry should move toward standardized wordings.
“It can never be the way forward for the cyber market to have a uniform wording across all carriers simply because it’s easier — that’s not what we are here for as advisors and insurance professionals,” says Lindsey Nelson, head of cyber development at CFC. “A uniform or standard wording used by all carriers significantly dilutes the product down to a price point and doesn’t allow for the continuous innovation by carriers the product deserves.”
Adam Mitchell, CEO of brokerage Mitch Insurance, agrees with Markell that it can be tough for brokers to sell cyber, given there are no standardized wordings or limits, “and they’re changing so much every year,” he says.
“It’s wildly nimble, and it’s very difficult to stay up on it if you don’t have some technology to help you navigate it,” Mitchell says. “Trying to keep up-to-date with the memos and be quoting to each company on your own, and then to bring it back and attempt to compare it might be one of the closer things to impossible.”
In Mitch Insurance’s case, brokers use technology platform Quotey to “compare apples to oranges to bananas,” Mitchell says. “I think a lot of brokers wouldn’t have the awareness that there are tools out there right now like Quotey that will line-item every coverage.”
While basic cyber coverage is widely available, coverage that actually protects customers against their biggest exposures is often more difficult to obtain at a reasonable cost and/or not as easy for customers and more junior brokers to understand clearly, adds Matthew Friesen, vice president of central sales with Western Financial Group.
“Coverages like extortion or bricking are often excluded in basic packages but are the coverages that really make up the bulk of the exposure,” Friesen says. “Helping customers and brokers alike understand what they are truly buying, in an easy-to-understand way, is key for this coverage to be more widely sold.”
Feature image by iStock.com/Supatman
