Expanding cyber to international markets requires clear messaging: CFC’s Philippa Berry
Philippa Berry says the cyber market tends to overcomplicate its messaging, particularly when targeting small to medium-sized enterprise clients
Coverage developments have made the cyber product more appealing to markets outside the US, underwriting firm’s head of portfolio partnerships, Philippa Berry, tells the Insurance Day Podcast
Underwriters looking to break into the international cyber market need clear messaging focusing on the benefits of the product, CFC’s Philippa Berry said.
Speaking on the Insurance Day Podcast, the cyber underwriter’s head of portfolio partnerships said the market tended to overcomplicate its messaging, particularly when targeting small to medium-sized enterprise (SME) clients.
The latest edition of the podcast explores how cyber underwriters are looking to tap into new sources of premium, such as Europe, Asia and Australia, as growth slows in established cyber insurance markets. A recent estimate from broker Howden predicts global cyber premiums will increase to $43bn by 2030, up from $15bn last year, with more than half of that growth coming from outside the US.
Berry said the market has a strong product that can meet growing demand outside the traditional US and UK markets. “The cyber market so far, we’ve not been very good at having a very clear, concise message on what we’re offering to our clients,” she said. “We might have overcomplicated the product and overcomplicated the process by which you can obtain the product.”
This is particularly true for SME clients, where the focus in both the US and international markets is on cyber crime, including social engineering, theft of funds and ransomware. “It goes back to making sure we’re providing the right product to people to help them when they become victims of a cyber attack,” she said.
The growth in first-party cover – as well as an increase in add-on cyber security provisions – has made cyber insurance more attractive to international markets, Berry continued. “Internationally it’s always been a first-party product that has been needed by clients – business interruption focus primarily and then moving into ransomware and extortion cover,” Berry said. While in its early years cyber was heavily focused on privacy liability, catering to emerging regulatory risks in the US, now there is a consistent and strong first-party offering, she continued.
“It wasn’t until the product caught up with what the clients were needing internationally that we saw this surge of growth in the international space,” Berry said. There is also “much more consideration [among clients] that the value is the response services, the risk management services, the proactive services provided by your insurer”, she added.
There has been a shift in focus in the London market over the past 18 to 20 months towards international cyber, Berry said; however, she disagreed with the premise this has been driven by a saturation in the UK and US markets. “We’re certainly not seeing that,” she said.
Berry said there has been a combination of increasing cyber exposure in international markets and greater awareness of cyber risk, alongside the development of a product that is more suited to the customers.
“There’s absolutely exposure that’s increasing internationally and I think there’s an increased awareness of it, which means there is runway for insurers and brokers to be to be working and moving into that space,” she said.
