A Broker's Practical Guide to Cyber Insurance Success

The cyber insurance market has experienced a fundamental transformation. What was once a straightforward product placement has evolved into a complex underwriting challenge, where traditional proposal forms are no longer sufficient. For brokers working with higher-risk clients, such as those in retail/e-commerce, financial services, legal, and technology sectors, finding appropriate coverage on fair terms has become increasingly difficult.

The reality is stark: insurers are demanding greater transparency into policyholder cyber resilience, and traditional cyber proposals that focus solely on technical controls are leaving critical gaps. These gaps centre around human cyber risk and governance deficiencies, areas that underwriters view as fundamental to their decision-making process.

This isn't just about having the right firewall or endpoint protection anymore. It's about demonstrating organisational maturity in managing cyber risk as a business issue, not merely an IT problem. Recent attacks on Marks & Spencer, Co-Op, Harrods and KNP have brought this into sharp focus, but will it change how businesses approach cyber insurance and how insurers assess the risks? 

The New Insurability Framework

To help your clients become truly insurable in today's market, you need to guide them through three critical areas that underwriters increasingly scrutinise: governance maturity, human risk management, and business resilience.

Governance Maturity forms the foundation of insurability. This encompasses board-level oversight of cyber risk, well-documented policies and procedures, and clear accountability structures. When insurers assess a potential policyholder, they're looking for evidence that cyber risk is treated as a business risk at the highest levels of the organisation. This means regular board reporting on cyber issues, documented risk appetite statements, and clear lines of responsibility for cybersecurity decisions.

Your clients need to demonstrate that their approach to cyber risk extends beyond their IT department. The most insurable organisations have cyber risk embedded in their governance framework, with senior executives who can articulate their cyber risk strategy and demonstrate how it aligns with business objectives.

Human Risk Management addresses what many consider the weakest link in cybersecurity: people. This involves comprehensive training programmes, fostering a security-conscious culture, and robust incident response capabilities. Insurers understand that the most sophisticated technical controls can be undermined by a single employee clicking a malicious link or falling victim to a social engineering attack.

The organisations that secure the best coverage terms are those that can demonstrate systematic approaches to human risk. This includes regular security awareness training, phishing simulation exercises, and clear procedures for reporting suspicious activities. More importantly, they can show evidence of a culture where security is everyone's responsibility, not just the IT teams.

Business Resilience encompasses continuity planning and recovery capabilities. Insurers want to understand not just how well an organisation can prevent cyber incidents, but how quickly and effectively they can recover when something does go wrong. This includes tested backup systems, documented recovery procedures, and the ability to maintain critical business functions during a cyber incident.

The most insurable clients can demonstrate that they've thought through various cyber incident scenarios and have practical, tested plans for maintaining operations. They can show evidence of regular testing of their business continuity plans and clear metrics for recovery time objectives.

Practical Steps to Enhance Client Insurability

As a broker, you can take several concrete actions to help your clients improve their insurability profile. Start by conducting an honest assessment of where your client stands in each of the three areas above. This doesn't require technical expertise; it's about understanding business processes and governance structures.

Encourage your clients to document their cyber risk management efforts comprehensively. Insurers increasingly want to see evidence of structured approaches to cyber risk, not just assurances that "everything is fine", or that my IT Service Provider manages that. This documentation should include board minutes showing cyber risk discussions, training records demonstrating employee engagement with security awareness programmes, and evidence of regular testing of business continuity plans.

Help your clients understand that cyber risk management is an ongoing process, not a one-time exercise. The most successful placements often come from organisations that can demonstrate continuous improvement in their cyber risk posture. This might include regular reviews of their cyber risk assessment, updates to their incident response plans based on lessons learned, or evidence of how they've incorporated new threats into their risk management approach.

Consider positioning yourself as a strategic advisor rather than just an insurance intermediary. Clients who receive proactive guidance on improving their cyber risk posture are more likely to remain with brokers who offer valuable, ongoing advisory services. This differentiation becomes particularly important when competing against larger firms with more resources.

Preparing Clients for Today's Market Reality

The current cyber insurance market rewards preparation and penalises reactive approaches. Help your clients understand that the placement process begins long before their renewal date. The most successful outcomes occur when clients have spent time throughout the policy period improving their cyber risk posture and documenting these improvements.

Work with your clients to understand the specific concerns of the insurers you'll be approaching. Different insurers have different risk appetites and focus areas. Some may be particularly concerned about ransomware resilience, while others might focus more heavily on data protection compliance. Understanding these nuances allows you to help your clients present their risk management efforts most compellingly.

Encourage transparency throughout the placement process. The days of hoping insurers won't discover risk factors are long gone. The most successful placements come from organisations that proactively identify their risk areas and demonstrate concrete steps they're taking to address them. This transparency builds trust with underwriters and often leads to more favourable terms.

The Competitive Advantage of a Comprehensive Risk Assessment

In this challenging market environment, brokers who can offer more than just policy placement have a significant advantage. Clients facing cyber insurance challenges need partners who can help them navigate the complexities of modern risk management and insurability requirements.

Working with specialist partners who understand both the technical aspects of cyber risk and the commercial realities of insurance placement can transform your ability to serve higher-risk clients. These partnerships allow you to offer sophisticated risk assessment capabilities that rival those of larger, multinational brokerage firms while maintaining the personal service and agility that clients value from independent brokers.

The most successful brokers in today's market are those who position themselves as trusted advisors with access to specialist expertise when needed. This approach allows you to compete effectively for high-value clients who might otherwise be drawn to larger firms with in-house risk management capabilities.

When you can demonstrate to insurers that your clients have undergone comprehensive risk assessments that address governance, human factors, and business resilience, you're providing underwriters with the confidence they need to offer better terms. This creates a powerful cycle where your ability to secure better coverage terms strengthens your relationships with both clients and insurers.

Moving Forward

The cyber insurance market will continue to evolve, but the fundamental shift towards comprehensive risk assessment is permanent. Clients who adapt to this new reality by addressing governance maturity, human risk management, and business resilience will find themselves in a much stronger position when seeking coverage.

As a broker, your role in guiding clients through this transformation is crucial. By helping them understand what insurers are looking for and providing practical steps for improvement, you position yourself as an indispensable partner in their risk management journey.

The brokers who thrive in this environment will be those who embrace the shift from product placement to strategic advisory services. This evolution requires new approaches and sometimes new partnerships, but it also creates opportunities to build deeper, more valuable relationships with clients who increasingly recognise the importance of comprehensive cyber risk management.

If you're working with clients who are struggling to secure adequate cyber coverage or facing significant premium increases, it may be time to explore how a comprehensive risk assessment can transform their insurability. The market rewards preparation, transparency, and systematic approaches to risk management. By helping your clients excel in these areas, you can secure better outcomes while strengthening your position as their trusted advisor.

For a confidential discussion about how a comprehensive cyber risk assessment can help you place challenging risks and support your higher-risk clients, contact Hazel Richardson at hazel.richardson@infoprotect.co.uk