As technology continues to advance, so does cybercrime. According to DARKReading, businesses suffered 50% more cyberattack attempts per week on corporate networks globally in 2021 compared with 2020. Additional research indicates that global cybercrime costs could grow by 15% annually over the next five years, reaching $10.5 trillion annually by 2025.
While these trends generate demand for cyber insurance, they also create new challenges for agents and brokers. Fortunately, insurtech platforms play a significant role in helping insurance professionals adapt and increase capacity.
Cyber Insurance: A Hard Market
The cyber insurance industry ebbs and flows based on cybersecurity trends and other market factors. The recent uptick in cyber threats has created a hard market, with demand for cyber insurance skyrocketing across nearly every industry.
But, more cyber threats mean more losses. For example, Colonial Pipeline Co. fell victim to a ransomware attack, resulting in $4.4 million in damages. Between 2020 and 2021, average ransom payments soared to 82%. As a result, premiums are skyrocketing and, despite growing demand, insurance carriers are only writing business with agents and brokers who have a proven track record in selling cyber insurance.
[FREE CHECKLIST DOWNLOAD] How to Secure Cyber Insurance Capacity
Insurtech, a combination of “insurance” and “technology,” is key to addressing these capacity challenges, yet not all platforms are created equally.
A Comparison of Insurtech Platforms
Inflated pricing and stricter underwriting controls make it increasingly difficult for brokers and agents to write business. With limited options for quoting cyber policies, insurance professionals must adopt innovative digital solutions to meet clients’ needs for coverages and pricing.
Let’s review the main types of insurtech platforms and how they can help agents and brokers adapt to the current market.
Direct Carrier Portals
Direct carrier portals are often designed for both brokers and policyholders. The policyholder, for example, may access the tool to research and buy insurance, submit claims and pay bills, and update coverage as their financial needs change. On the other hand, agents and brokers can use the tool to obtain quotes, transmit claims data, and renew policies.
While accessible and user-friendly, these insurtech platforms are carrier-specific, meaning agents can only pull quotes from one provider at a time. To request and compare multiple quotes, you must retrieve quotes from several portals and then manually organize them in an outside platform such as Excel to compare factors like limits, sublimits, and premiums. Overall, this process introduces friction that only slows down agents and brokers in a hard cyber market.
Small Commercial Platforms
Commercial insurtech platforms are typically intuitive and user-friendly. Agents and brokers can use them to pull several competitive quotes from popular markets quickly.
The main concern with these solutions, though, is the level of complexity these platforms can accommodate. As cyber threats proliferate and you write more cyber business, you need to leverage an insurtech platform that can handle complex risks, thus growing and scaling with you. Keep this in mind when choosing the right tool for your brokerage.
Platforms With Indications
This breed of insurtech platform gives agents and brokers an estimated, non-binding rate based on common underwriting questions such as risk exposure and loss history. This rate is subject to the provision of additional details.
These tools help agents and brokers get a broad understanding of the insured’s coverage options. However, they are not bindable. If your goal is to write more cyber business and secure capacity, you’ll need to leverage an insurtech platform that streamlines the quote and proposal processes.
What About Relay?
With Relay, agents and brokers can get 90% faster quotes with a single-entry data system. Relay innovated the first Multi-Tower Risk Placement™ module that produces multi-line and multi-layer risk visualization to address the problem of managing complex risks.
With a library of pre-built templates, brokers and agents can create winning proposals — known as Smart Customer Proposals™ — with trusted capacity providers and industry leaders. Brokers and agents can also integrate their own proposal formats into the system. Best of all, Relay is scalable to any size brokerage.
The hard market isn't going away soon, and there is never a better time for brokers and agents to utilize insurtech to increase efficiency and achieve capacity.
With Relay, you receive an accurate representation of the differences between each quote, and you can even add quotes from outside the platform for increased flexibility. Contact us today to learn more and schedule your demo.