Tag: insurance

Cyber Insurance market to triple

Republic_Fire_Insurance_Company_certificateThe cyber insurance market will triple in size to $7.5 billion in annual premiums by 2020 according to a new consultant’s report.

But PwC said insurance companies would not be laughing all the way to the bank as the insurance industry could face competition from disruptors such as Google.

Insurers and reinsurers are charging high prices for cyber cover and putting a ceiling on potential losses, deterring companies from buying cyber polices, in the report. Some insurers have kept out of the market, wary of the risks.
PwC’s Paul Delbridge said that if the industry takes too long, there is a risk that a disruptor could move in and corner the market by aggressively cutting prices or offering much more favourable terms.

Millennials – people in their 20s and 30s – are more likely to trust brands such as Google than conventional insurers and Google would be very creative.

Technology companies may also be better equipped than insurers to price cyber risk, he added.
Most of the $2.5 billion written in cyber insurance last year was in the United States, where requirements to notify data breaches have focused attention on cyber protection.

But the European Union is expected to follow suit, contributing strongly to growth in cyber insurance, Delbridge said.

British firms have no cyber security insurance

insuranceIf a hacker takes out a large UK company, it appears that most of the time the company will have to pay out to fix it. Less than two percent of large British firms have separate insurance against cyber-attacks. Hardly any smaller firms have it..

The UK government has issued a report responding to concern that companies are not protected against the risks of cyber-attacks, which cost billions of pounds annually to the UK economy.

The report, published jointly with insurance broker Marsh, recommends that the government and the insurance industry pool data and information to encourage take-up of cyber insurance.

Half of the business leaders interviewed for the report did not even know cyber insurance existed, it said, even though many firms place cyber attacks among their leading risks.

“Cyber attacks against UK companies present a daily threat to normal UK business operations and are increasing in severity,” the report said.

Of course the government did not think that direct government financial support was needed in the cyber insurance market.

“While some market participants have suggested that a possible government backstop may be necessary, there is no conclusive evidence of the need for such a solution at present,” the report said.

The government supports terrorism insurance scheme Pool Re, through a commitment to make up the shortfall if the scheme runs out of money to pay a claim.

Insurance industry drags feet on big data


next-years-mainframe-model-comes-in-nearly-half-the-spaceThe insurance industry
is in danger of falling behind other companies because it is not interested in the latest digital technology.

Reuters reported that while some insurers are using developments such as telematics, or social media sources, to increase the amount of information they have about customers to reduce claims and make insurance cheaper for all most are luddite laggers.

Famously we will probably need  “black boxes” in our cars so that we can be rewarded with lower insurance premiums if we drive carefully.

But apparently when it comes to Big Data, insurance companies are saying a big “no.”

This is because the insurance industry is still locked in the early 20th century, where pen and paper were mightier even that the typewriter.

Staff at Lloyd’s, home to more than 90 trading syndicates in London’s financial district, still trundle suitcases of claim forms for complex insurance transactions.

Lloyd’s Chief Executive Inga Beale has said the industry needs to take technology on board to maintain its role in global business. The firm recently appointed a Chief Data Officer and Beale said the sector needs to attract new, tech-savvy talent.

Part if the difficulty is that there are a mass of different systems out there and firms are often  swallowed up by bigger insurers, makes it hard to streamline technology.

Firms might like the idea of technology, but cannot be bothered spending because they are having trouble balancing their books with bond yields at record lows.

This is despite the fact that a report from Morgan Stanley and Boston Consulting Group says the first movers will clean up.

They say a full transformation to becoming a digital company could cut an insurer’s combined ratio by 21 percentage points, in other words making the firm more profitable. Expenses could fall by 10 percent of premiums and claims by 8 percent.

 

Seagate hatches insurance scheme

seagate-longmontStorage company Seagate is introducing insurance plans to give customers some peace of mind.

For $30, customers can sign up for two years of Seagate Rescue, where the company will save your lost data from a dodgy hard drive. Rescue and Replace, meanwhile, will not only recover your data but also send you a replacement hard drive.

Veep of marketing at Seagate, Scott Horn, suggested the company is actively trying to maintain its reputation of trust, as well as having it “provide peace of mind for those unforeseen events that might damage a drive or its contents”.

At the moment the service is only available at Seagate.com. In addition to the starting price of $30 for two years of Seagate Rescue, Rescue and Replace begins at $40 for two years, $50 or $60 for three and four respectively.

Rescuing data can prove expensive, but it will be up to the customer if they want to spend cash on a failure that may or may not happen.

For those even more paranoid about their data, it might be worth investing in an ioSafe hard drive, which can be submerged in water, run over with bulldozers, or blasted with a shotgun.

Insurers should cash in on tech-obsessed Brits

howardbrownHalifax has unveiled its Insurance Digital Home Index report which claims that a large majority of the UK population would find it tough to revert to a life without smartphones, laptops, and MP3 players – even for one day.

According to the report, 35 million, or 74 percent of the UK checks its emails and social networks before work in the morning. A fifth prefers using the phone or social media rather than face to face interaction, the research claims. Halifax grapped psychologist Dr Aric Sigman, who has previously loudly said in the media that parents should cut kids’ screen time, to say by the age of seven years, the average child will have spent one full year of 24 hour days watching screens.

“By the time they reach 80 they will have spent almost 18 years of 24 hour days watching non-work related screen technology,” Sigman said.

While Sigman warns that the “over-use” of technology is having an effect on all age groups, he asserts that young people in particular will be going through a change in the way we interact. “We have to remind ourselves that technology should be a tool, not a burden or obstruction,” he said.

A compelling argument for introducing sporting items such as the cricket bat to the family telly, you might think. Martyn Foulds, senior claims manager at Halifax, said such arguments are the reason more people should insure their electronics. According to the report, roughly one in 10 lack insurance for their technology items – creating a “potential £32 billion insurance black hole”.

“It’s surprising that despite high investment and heavy reliance on technology, people are still willing to risk losing their items and digital content by failing to ensure they have adequate insurance cover,” Foulds said. “With almost one in five people not insuring their items, this leaves the UK overwhelming exposed to the tune of £32 billion on gadgets alone”.

Although an anecdotal straw-poll conducted by ChannelEye asserted that there is a pervasive viewpoint of insurance as an extortionate wheeze based on fear, Foulds has a point for insurers who want to diversify their portfolio and bring in new revenue streams.

With, according to the report, 35 million people in the UK placing a daily reliance on technology, that is a large section of the public to sell insurance to. Almost a quarter of the UK, Halifax says, would feel a sense of anxiety without their technology.

An enormous 96 percent of the UK population carry their mobiles with them outside the home, while 9 million take their MP3 players with them, and 20 million use their digital cameras away from the home.

As entrenched as technology is, then, insurers should be fiercely competing for contracts and convincing cash-strapped and anxious Brits that tech is as vital as home insurance. Having said that, the technology industry moves so quickly it is not long before devices depreciate in price – replaced by newer models that cost more. It is also more difficult to value the worth of a gadget depending on a range of factors: how long until it is redundant or worth merely pennies? All of these questions are reasons why insuring gadgets could turn even more dosh for insurers.

Insurance companies don’t know who their customers are

insuranceResellers trying to peddle insurance along with hardware packages might find themselves in hot water because the insurance industry has a problem identifying its customers.

Analyst outfit Ovum said that insurance companies are badly informed when it comes to working out who their customers are as the whole industry is getting turned on its head by new technology.

New research from the analysts highlights how the insurance sector is trying to adapt to new models of commerce and some are falling behind.

An Ovum spokesperson said that insurance is moving from a model where one-to-many messaging works, particularly in mass media, to a framework where consumers are gaining more power in the business transaction.

This means that insurance companies are designing packages which do not meet the needs of consumers and if they are being sold as part of a reseller, or warranty package, then it will the IT company that gets hit by the backlash.

Ovum believes that until insurers understand who the customer is, they will be unable to shape, deliver, and strengthen the experience each customer expects. It thinks that insurers, and those who are peddling it, must ensure that marketing is tailored to each individual customer as closely as possible.

Barry Rabkin, principal analyst, Insurance Technology warned that the insurance industry was headed towards a competitive myopia.

He said that customer experiences were becoming the basis of competition in the insurance industry and companies need to encompass customer needs, expectations, and satisfaction into their customer experience management (CEM) strategy.

Bad experiences were also more likely to be communicated thanks to the spread of mobile technology and users who are more informed and interconnected people who are seeking advice from each other.

If a reseller does not closely monitor their insurance packages to make sure they are what their customers think they are getting, it could be their brand that suffers. Customers are more likely to blame the company they bought the package from, before they moan about the insurance.

Resellers have to offer more personalised insurance packages rather than hoping that one size will fit all.

Insurers and the companies that repackage their products must quickly weave in the importance of customer experience into the company strategy at each touch point in order to succeed or fail to meet their expectations, Rabkin said.