Cyber Security Is a Conversation Agents Need to Have with Clients

Not only are more people working from home than ever before, but entire families are shopping online and using the Internet of Things — Alexa, Siri, Google Home, and other technology embedded with sensors or software — for sharing and connecting data with other devices.

While everyone loves the convenience such technology brings, some may not know that cyber criminals are increasingly targeting them and putting their private information and financial accounts at risk.

Clients may assume there is coverage from these risks under their homeowners policy. However, not all homeowners insurance covers cyberattacks. The Insurance Information Institute reports that four out of five people with connected devices either lack coverage or don’t know if they are covered.

Now is the time for independent agents to ask their carriers about cybersecurity coverage options – either as an add-on to homeowners, renters or condominium policies, or a stand-alone policy. Demand and availability of these products are growing; informing clients of the risks while offering risk mitigation advice and insurance coverage enhances an agent’s value to their clients.

Independent agents can inform clients about the risks of criminals tapping into their confidential information for financial gain. Educating clients about the increased risks of being online each day may convince them that protecting themselves with cybersecurity insurance is a wise choice.

Cyber Risk Trends

Cybersecurity has long been a concern for big corporations and has quickly spread to small and medium businesses as well as consumers, who need to understand more about the fine line between using the internet safely and becoming targets of cyber criminals.

Think about a day in the life of an average consumer working from home — sharing information, from driver’s license numbers and birthdates to credit and debit cards, and often using the same passwords over and over for various accounts. Each action unknowingly opens the door to their information through cyber attacks, most often identity theft, malware, phishing attacks and ransomware:

• Identity theft occurs when a criminal uses another person’s personal identifying information, name, or credit card number to commit fraud. According to a recent AARP report, identity fraud losses were estimated to be $16.9 billion in 2019.
• Malware users create access to a network and can spy on the user to get their credentials or cause disruption.
• Phishing happens when an attacker sends an email to trick someone into giving their private information, such as passwords, credit card details, and more.
• Ransomware, or cyber extortion, extorts the victim, encrypting and holding their data hostage until the victim pays money to get it back. It is critical to ensure clients understand the risks when navigating and surfing the web. For instance, when the client visits certain websites, a laptop or computer camera can turn on automatically without the client’s knowledge.

Microsoft points out that cyber criminals have shifted their focus from malware attacks to phishing attacks by more than 70% as a more direct means to achieve their goal of harvesting people’s credentials. To trick people into giving up their credentials, attackers often send emails imitating top brands like Microsoft, UPS, Amazon, Apple and Zoom. Yet, even while these incidents multiply, it is still challenging to get clients to take the threat seriously.

Coverage and Risk Mitigation

How should independent agents approach clients about cyber risks? Agents can educate clients about ways they contribute to their cyber exposure, how they can prevent cyber attacks, and why they should invest in affordable cybersecurity insurance. The cost of cyber insurance for individuals varies depending on what is covered and how it is purchased.

Independent agents can use their website and social media channels to educate others about cyber risk coverage and its ease of purchase.

Give clients and prospects the tools they need to prevent a cyber attack from happening: discuss how many people are affected today, the average costs of a cyber attack and which products are available to reduce their risk and why. Compare the financial risks to the low cost of cybersecurity insurance.

Focus on simple solutions. For example, using the same password multiple times increases risk of cyber attacks. Advise clients to keep track of passwords and encrypt data using a password manager. These are encrypted digital vaults that store secure password login information to access apps and accounts on mobile devices, websites, and other services and help ensure that the same password is not overused.

Discussing the pain point with clients — alerting them to the cost of losing data such as social security numbers, credit and debit card numbers — will get their attention and put cyber insurance on their radar. The time and money needed to recover data, restore security and regain peace of mind will play a large part in their decision to purchase cyber insurance.

Share that personal cyber attacks can be costly, frustrating and time consuming.

According to a recent article in Forbes, “Aside from direct financial losses, like paying a ransom or having a thief run up your credit card bill, you might face other financial consequences. You could have expenses to restore your identity and data, legal fees for lawsuits, and even temporary living expenses due to cyberbullying.”

For example, LifeLock recently reported that it takes an average of 12 to 26 hours to recover one’s identity after it is stolen, with a cost of $354 to $1,205 depending on whether it was a new or existing account.

A homeowners policy may have minimum limits to cover a cyber attack, and a stand-alone policy with higher limits may make the most sense if clients work from home. As agents offer clients a cyber product, they should discuss their needs and define the cyber coverage obtained with a homeowners, renter’s or condominium policy or a stand-alone policy with added coverage and limits.

Independent agents shouldn’t miss the opportunity to help their clients with an escalating cybersecurity problem. Raise awareness by sharing cybersecurity news and updates throughout the agency marketing channels, and upsell and cross-sell cybersecurity products to protect clients from challenging cyber risks now and in the future.