In the evolving world of cyber insurance, trust is becoming essential. As the market grows, managing general agents (MGAs) are focusing more on their relationships with brokers rather than just the products they offer. This shift is crucial as threats like ransomware and social engineering continue to change the landscape of cybersecurity.
With global cybercrime costs reaching $8 trillion in 2023 and expected to rise to $10.5 trillion by 2025, brokers are under pressure. They must provide more than just policies; they need partners who can react quickly to new risks. However, many traditional insurance providers are struggling to keep up, often offering outdated coverage and failing to educate brokers about emerging threats.
Patrick Costello, co-founder of Evolve MGA, is addressing these challenges head-on. His company has quickly become a leading cyber-focused MGA in the United States by emphasizing the "human element" in underwriting. Costello believes that responsiveness, adaptability, transparency, and building friendships are vital for success in this industry.
Costello highlights that quick responses are crucial. In the cyber insurance space, where premiums are generally low and urgency is high, being able to provide a quote just before a broker’s meeting can make a significant difference. He emphasizes the need for products that are competitive in terms of coverage and rates, stating that without this, building a relationship is difficult.
Moreover, transparency is key. Costello warns against insurance carriers that overpromise and underdeliver, which can lead to confusion about what is covered. Honest communication between underwriters and brokers is essential for maintaining trust.
Evolve MGA also prioritizes education. They use engaging marketing videos and offer training sessions to help brokers understand cyber coverage and common claims. One of their standout initiatives includes a memorable video on wire transfer fraud, designed to be both informative and entertaining.
As cyber threats grow more sophisticated, Costello notes that issues like ransomware and wire transfer fraud are still prevalent and affect all industries. He points out that small businesses, often reluctant to publicize hacking incidents, are particularly vulnerable.
Looking ahead, the rise of technologies like deepfake presents new challenges. Costello emphasizes the need for clearer policy language to address these emerging threats and suggests that risk mitigation practices, such as staff training and multi-factor authentication, are becoming critical factors in pricing policies.
In summary, as the cyber insurance market continues to evolve, the focus is shifting towards building strong relationships and providing clear, effective education. Companies like Evolve MGA are leading the way by prioritizing responsiveness and transparency, ensuring they can meet the needs of brokers and their clients in a rapidly changing environment.