Insurers prepare for personal cyber insurance demand
Insurers are preparing for a surge in demand for cyber cover in personal lines as the awareness of the risk grows in the population and cybercrime cases jump.
While traditional crime has been falling steadily in the past 20 years in the UK, cybercrime cases have shot up in recent years, surpassing the total number of cases of traditional crimes, according to data from the Office for National Statistics.
Ransomware attacks such as WannaCry which affected more than 200,000 organisations in 150 countries, stopping car factories, hospitals, shops and schools, could also affect private lines customers, said Tim Marshall, cyber underwriter at Munich Re during a June 13 presentation at Lloyd’s.
In order to prepare for the expected growth in demand for personal cyber insurance, Munich Re and managing general agent UK General have partnered to develop a product for personal lines.
Fraudsters have, for example, been able to take over transactions from Santander and were not reimbursed by the bank, UK General managing director Karen Beales explained. An online holiday booking could turn out to be a scam, she added. In 2016, holiday booking scams totalled over £7 million, according to BBC research. Also, an online purchased product may never arrive, all cases in which personal cyber insurance could assist and reimburse clients, Beales explained the drivers behind the new product.
The insurance should also include cyber bullying, a phenomenon which is becoming increasingly common due to the spread of social media, Beales noted. Almost 40 percent of participants in a survey said they experience frequent cyber bullying online, most of them involving explicit images, according to the presentation.
The new cyber product may first be sold as an add-on to an insurance contract, most likely home insurance, potentially also within a mobile device (gadget) policy.
“At the moment, if you put it in home insurance, you are putting something in front of someone who is currently considering buying insurance,” Marshall explained the rationale.
This news story is just a snapshot of a longer feature on Intelligent Insurer. To find out more about why personal cyber insurance may become the next big thing in the sector, please click here.
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