It’s nothing new to say that cyber crime is rising meteorically – the Office for National Statistics (ONS) reported 5.6 million incidents of fraud and cybercrime last year in the UK alone. But while insurers have responded to cyber risks in the commercial space, there is very little available when it comes to coverage within personal lines.
Insurance – along with the help of Munich Re
– is trying to make cyber personal, by bringing cyber liability coverage to the everyday consumer. Collectively, the industry is selling a lot of cyber coverage in the commercial space, but there may be a market for personal lines products, according to UK General
’s CEO, Karen Beales.
The MGA has been working on a product that will combine several areas of cover, Beales revealed at an event at Lloyd’s in London yesterday. Alongside Munich Re, the company has been “taking the learnings from commercial products and feeding those down into what the personal lines product could look like,” she explained.
Proposed coverage would include hacking and the potential loss of funds as a result, reimbursement for items ordered online that do not arrive or are not as expected, and even cyber bullying. The emphasis would be largely on service, with the key selling point being a response hotline to provide immediate advice to consumers in the case of an event.
There is a general mistaken belief among consumers that they will be reimbursed by their bank or credit card company in the event that they are the victim of a cyber crime, according to Beales, and this view needs to be challenged in order for personal lines cyber coverage to gain traction.
“We need to be very, very clear about the product and why it is on offer, and actually why it is essential,” Beales explained. “We genuinely think it’s something that as MGAs and as brokers we will need to talk to our customers about.”
The coverage would likely be sold, in the first instance, as a fixed price add-on to home insurance policies, though the prospect of adding it on to gadget policies is also being considered. In the future, there is the potential for it to be sold as a stand-alone, as awareness of cyber risks grow and exposures continue to evolve – which would likely lead to higher premiums and increased indemnity limits.
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