It’s not really in our nature to love competition. In fact, it’s complete animal instinct to want there to be no competition at all. This applies to business, relationships and basically every other form of human interaction. Nobody wants to compete. So you can imagine how a growth in businesses taking out cyber insurance (and therefore business insurance) could be a little concerning to certain people in the digital sphere.
It’s easy to assume that more cyber insurance means more cyber insurance brands popping up, which means larger amounts of industry regulation. This could lead to increased governmental interest and therefore higher maintenance fees. This could bump up premiums for consumers (businesses) who are then paying significantly higher amounts for their existing policies.
I mean, isn’t this how insurance works sometimes?
Maybe in some cases yes, but more people taking out cyber insurance for now is a great thing for the industry and for SMEs.
Well for starters it’s currently a very new industry. Nobody’s really sure what’s going on and therefore it’s hard to gauge any concept of consistent pricing or even just the average premium for a basic package. In fact, because the industry is so new, it means that through some insurers there may not even be a basic package.
Because of this, the expansion of the industry could mean more consistency in pricing and policy inclusions, which is a great thing for businesses. It will be much easier to get a quote, and therefore much more easy to compare online in order to get the best deal.
Policy prices could even potentially go down. If there is an increase in profit for large cyber insurance companies or providers, that means the risk involved with providing cover for certain businesses could decrease. They may feel more inclined to be fair with their policies if there is more customer interest.
Greater competition also means more competitive pricing. The more the industry grows, the more likely it is that companies will start providing business insurance. It will either be current general insurers in the Australian market (e.g. Budget Direct, AAMI, etc.) branching further into the cyber insurance realm, or it will be new entrants. But each provider will want to have an edge, and that edge could be in the form of pricing.
It also means more protection for you and your business, and other people and their businesses. At the end of the day, having the protection you need is important to afford SMEs the peace of mind that any kind of data or security breach won’t go unrectified. Cyber liability insurance policies include benefits like risk management, and covering the costs of alerting customers to the breach. It’s really worth having a policy in place, and a growth in the marketplace means you’ll have better access to one.
Just a bit of food for thought.