Cyber risks are unlike any other in that it is incredibly difficult to pinpoint where a threat will be coming from making underwriters’ lives particularly challenging.
In this constantly evolving realm, insurers need to be creative in their risk management approach.
CEO and co-founder of At-Bay, Rotem Iram, sat down with Insurance Business at Insurtech Connect and discussed some unique strategies to create better insurance solutions for this rapidly growing segment.
“Instead of asking a long list of questions about the security of a company, we actually try to attack them,” he explained. “It’s called a non-intrusive penetration test which is a way for us to identify major issues, and we won’t be a company’s insurance provider until they are resolved.”
Iram noted that the penetration test is run weekly on every company in At-Bay’s portfolio, allowing them to constantly add newly identified risks to their data stack.
Creating a healthy cyber insurance market starts with being proactive and constantly monitoring the security of a company. As attacks evolve, the defensive approach must do the same for optimal safety.
“We have a security team that reaches out and helps companies fix any issues,” he said. “When there’s a critical technological weakness, it’s a race for the attacker. They are looking at every American business, scanning every AP address, looking for companies that have huge gaps in their systems.
“Over the last 12-15 months we have been able to reduce the number of ransomware claims by more than seven times,” Iram added.
Ransomware is widely considered the biggest cyber risk today, and by reducing claims activity using innovative technology-based risk management strategies, underwriters are given broader terms to provide comprehensive coverage at a good price.
A breach could ruin a small company in a matter of seconds and merging security and insurance has helped businesses avoid what could be the worst day in their career.
“Half of our DNA is cyber security, research analysis and technology,” he said. “The other half is insurance. We are much more effective and efficient running insurance, as digital solutions unlock better automated processes.”
At-Bay leverages automation and provide clients with a robust distribution network. With API’s embedded in their system, underwriters are empowered to drive significant efficiencies into the space quickly, allowing brokers to sell cyber policies at a profit.
The underwriting approach to cyber is unique as information is constantly being gathered, and, for smaller accounts, At-Bay has an algorithm for make underwriting decisions.
“We don’t actually need a human underwriter in the process unless there’s a more challenging risk or a client needs special assistance,” said Iram. “Being able to automate the process is extremely beneficial, even with bigger accounts. Part of being digitally native means that we have the ability to build systems where all the data is on a platter ready for the underwriters to make smart decisions.”
Rather than underwriters creating five quotes a day, with At-Bay underwriters can make 20 a day allowing them to focus on bringing in new business and adding value to clients. Automation is therefore enhancing processing and profitability, but there’s more value that needs to be added.
“Underwriters need to be able to carry a technical conversation with brokers,” Iram said. “It’s important to train them about security risks in the context of financial outcomes, and automation helps them focus on having those conversations.”
