Why Accuracy & Speed Are Crucial to Cyber Capacity Limitations

The cyber insurance business has grown increasingly competitive in the last few years, with businesses’ demand for coverage increasing and insurers and reinsurers hesitant to take on additional risk in an increasingly unpredictable world.

COVID-19 and work-from-home initiatives have increased cyberattacks, especially ransomware. For example, the 2021 HP Wolf Security Blurred Lines & Blindspots Report found that 88% of IT Decision Makers (ITDMs) are concerned about rising cyber risks due to employees using personal devices that were not built with business security in mind. 

Likewise, Russia’s recent aggressive actions in Ukraine have also put the cybersecurity world on notice.   

Together, these trends create a more volatile cybersecurity environment for businesses, making cyber insurance carriers more hesitant to write policies with greater risk for loss. 

The Cyber Capacity Problem 

Cyber insurance has gotten more expensive, with many carriers increasing premiums and lowering coverage limits. Insurers and reinsurers have also limited their capacity, as the risk and cost of malicious cyberattacks have gone up.

As a broker or agent, finding an insurer with capacity to write your client’s cyber policy can be challenging. For all the reasons mentioned above, insurers are increasing their requirements and scrutiny on cyber policies and focusing on ransomware prevention and other high-risk areas. Likewise, capacity limitations are affecting insureds of all sizes. 

Increased premiums, tighter requirements, and limited cyber capacity have led businesses to spend more time considering policy options for their insurance needs. This puts pressure on brokers and carriers, as more quotes are requested and provided. 

Manual quoting is cumbersome for all parties, as brokers are repeatedly keying data to carriers who must personally review it to provide a quote. A slow, manual quoting process makes matching customer demand with insurance capacity more challenging. 

Using an insurtech platform like Relay assists brokers and agents in more efficiently submitting quotes using standardized data through APIs to provide instant quotes from carrier systems. Brokers can request and compare quotes more quickly and efficiently in a competitive landscape. Carriers can also reply and deliver quotes faster. 

Insurtech Is Key 

In an environment where cyber capacity is scarce, speed and accuracy are paramount. An insurtech platform like Relay, for example, can quickly match up broker and carrier. Accurate and standardized information can accelerate the quote process and increase deal-making, as carriers can be confident in the initial data provided by the broker, resulting in less after-the-fact underwriting due diligence before writing the policy. 

In any insurance market, brokers and carriers strive to be efficient in their quoting process. In a hard cyber market, efficiency and accuracy become even more critical. 

Using non-standardized data requires costly and lengthy manual review times by carriers. An insurtech platform increases efficiency, both time and cost perspectives, and helps carriers parse more data and provide more quotes to brokers. In turn, brokers can submit and receive a higher volume of quotes more quickly, allowing them to present their clients with a greater array of coverage options and premiums. 

Fewer carriers with capacity for cyber risk means fewer policy options available to clients. However, a platform like Relay enables brokers to get quotes quickly for a wide array of cyber risks without diverting underwriting resources away from more challenging risks. All parties — clients, brokers, and carriers — benefit from a streamlined quoting process offered by the Relay platform. 

In a hyper-competitive cyber insurance market, brokers find insurtech platforms essential to their business. With the ability to submit quote requests quickly and efficiently, brokers can more efficiently navigate cyber capacity limits from carriers by increasing their quote submissions, ultimately giving clients more options.  

It’s unlikely that cybersecurity risks and costs will decline in the years to come, so the industry can expect the cyber insurance market to remain competitive. Using a platform like Relay can help brokers and agents navigate this hard market. Schedule your demo now to learn more.