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As the world continues to evolve into a more digitally-focused place, insurance agents need to be aware of and know how to sell cyber insurance to businesses. With more businesses than ever online and incorporating touchless options to the inperson experience, businesses, and in turn, insurance agents that service those accounts, need to know the risks of cyber attacks, as well as how to protect themselves.
New types of attacks continue to emerge, and cybercriminals continue to find clever ways to steal data, infect computers with malware, lock access through ransomware, and more. Against this backdrop, insurance agents have an opportunity to learn how to sell cyber insurance to business owners.
Cyber insurance can’t offer the same cybersecurity protection that things like anti-malware software can in terms of prevention. But when cyberattacks, unfortunately, do occur and cause damage, cyber insurance can limit the fallout by covering associated costs that tend to follow, such as data recovery expenses, legal liability fees, and lost revenue stemming from the attack.
In this guide on how to sell cyber insurance, we’ll look at what insurance agents need to know to sell more of these policies.
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Background Needed to Sell Cyber Insurance
Cyber insurance is still a relatively new area of insurance, so you may need to brush up on your background knowledge before you dive too deep into how to sell cyber insurance.
In particular, it’s important to understand cybersecurity risks and associated costs so that you can speak with potential clients about their need for insurance in this regard. Taking a cybersecurity class online, such as through a platform like Coursera, could help. Agents also likely need to study up on what different cyber insurance policies include and how that differs from other types of commercial insurance.
What License Do You Need to Sell Cyber Insurance?
In general, you don’t need a special cyber insurance license. Many agents with a property & casualty license can also sell standalone cyber insurance policies. However, like with other licensing requirements, the specifics can vary from state to state and can change over time, so it’s important to check with your insurance regulator. Specific insurance companies also might have their own requirements before you can sell cyber insurance policies on their behalf.
Learning How to Sell Cyber Insurance
Once you determine what license you need to sell cyber insurance, you then need to learn how to sell cyber insurance in terms of the strategies used to close deals.
In the grand scheme of things, learning how to sell cyber insurance isn’t much different than learning how to sell property insurance or any other type of coverage. Insurance agents need to identify who would make a good prospect, use insurance marketing strategies to engage these prospects, and be able to explain how insurance policies can help solve the prospects’ pain points.
So, when it comes to selling cyber insurance, focus on areas such as the following:
Who Needs Cyber Insurance?
As the world becomes increasingly digital, the need for cyber insurance will likely grow. Still, not everyone necessarily needs cyber insurance, especially if the cost of obtaining this coverage outweighs the value the business is trying to protect. To find prospects most in need of cyber insurance, consider factors like:
- How valuable is a company’s data? If a company is in a highly sensitive industry, for example, the cost of data falling into the wrong hands could be high enough to warrant a need for cyber insurance (think doctors, lawyers, accountants). Much as you might assess the value of a property a business owner might need to protect through cyber insurance, consider the company’s digital footprint and data value to get a sense of whether they’d make a good prospect as you learn how to sell cyber insurance.
- How much of a handle does the company seem to have on cybersecurity? Knowing this information may require conversations with prospects, but once you get a profile of the type of company you can reasonably expect to sell insurance to, you can apply that framework to others. For example, you might find that businesses in a certain industry in the midst of scaling are struggling to protect their data as they grow.
How Does Cyber Insurance Address Risk?
As you start to narrow down who you want to try to sell cyber insurance to, it’s important to then be able to connect cyber insurance with risk, much as you would with other forms of insurance. Compare different cyber insurance policies that you might want to offer to clients and learn what risks they cover. Ideally, cyber insurance can help business owners address risk across areas like:
- Financial Risk: Generally, the overarching risk that cyber insurance helps protect against is financial risk. Cyber insurance can’t prevent a cyberattack, but it can help business owners prevent a cyber breach from wiping them out financially.
- Business Continuity Risk: Related to financial risk, cyber insurance can also help business owners get back on their feet faster. Following a breach, cyber insurance might cover the cost of data recovery, for example. So, good cyber insurance could help businesses reduce the risk of having to stop operations for a while, which costs money directly and can also cause harm, such as diminishing customer experience.
- Reputational Risk: A cyber breach can hurt a company’s reputation, so understanding how cyber insurance might reduce reputational risk could be a good selling point. For example, if cyber insurance helps cover the cost of doing a full cybersecurity sweep to root out what’s been breached and notify those who have had their data compromised, rather than just addressing the problem at the surface, the company might then be able to give its stakeholders confidence that the issue has been taken care of.
What Do Business Owners Want to Know About Cyber Insurance?
In addition to being able to talk to business owners about the risks that cyber insurance can help address, insurance agents should also learn what business owners want to know about cyber insurance policies. These can differ depending on factors like company size and their experience with insurance overall, but in general, potential customers will likely have questions in areas like:
- Why purchase cyber insurance as a standalone policy?
- How much does cyber insurance cost compared to what it covers?
- What circumstances would trigger claims?
A Deloitte study finds that cost and coverage limit concerns are the top reasons preventing middle-market buyers from purchasing standalone cyber insurance. Many also have some sort of cyber liability coverage in another commercial insurance policy.
That means that for those trying to figure out how to sell cyber insurance more, being able to clearly explain what a cyber policy includes, how it differentiates from other policies, and the costs vs. benefits can go a long way toward growing your book.
Proactively Offer Cyber Insurance to Business Owners
Being able to talk to prospects about cyber risk and address their questions about cyber insurance policies can help you sell more. But it’s also important to remember that clients won’t necessarily come knocking on your door to buy these policies. You have to be proactive.
As the Deloitte study finds, “Many agents and brokers charged with selling stand-alone cyber insurance policies do not appear to be pushing the product aggressively.”
Of course, you don’t want to harm client relationships and your reputation by pushing unnecessary products. But the more you learn about cybersecurity and cyber insurance overall, you may realize there are more instances where clients would benefit from purchasing these policies. Plus, as cybersecurity threats evolve, the need for cyber insurance policies may become more apparent.
So, speak with your existing clients to see if they might benefit from adding cyber insurance, and proactively connect with prospects who may be more in need of this support than you assume.