Benchmarking – it’s an integral tool in the broker’s toolbox. It’s a great way to start discussions about risk transfer and to grab the attention of the risk manager. It’s particularly useful for well-established lines of business, where take-up rate is strong and historical loss information is plentiful. But when it comes to newer lines of insurance business, like cyber liability, there are risks inherent in benchmarking that brokers need to be wary of.
Any broker or agent in the business of selling cyber insurance to middle-market firms will likely have heard the following come out of a risk manager and/or business owner’s mouth (or at least something very similar): “We’re a middle-market company with only $25 million in revenue. No cybercriminal is going to have any interest in us. They’re only going to target the giants like Google, Amazon, or the big banks. Why would they have any interest in us?”
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