Cyber insurance is one of the hottest topics in the industry, and for a good reason. Cybercrime is up and the cost of a data breach has never been higher with new regulations and the risk of reputational damage from media that have increasingly become more cyber-informed.
We spoke with Jack Kudale, Co-Founder & CEO of Cowbell Cyber, to discuss the changing role of cyber insurance in the time of advanced threats and ransomware.
Why is cyber insurance important in today’s threat landscape? How is Cowbell addressing the current gap in cyber insurance?
Nobody is immune to cyber incidents. Cybersecurity can be effective at avoiding and detecting cyber events early. But once an incident occurs, cyber insurance brings the resources needed for businesses to recover quickly and at a lower cost.
Insurability gaps have been common in the small and midsize market. The adoption of cyber insurance has been hindered by a lack of coverage clarity and relevance of policy options combined with a cumbersome application process.
Cowbell Cyber is bringing innovation in all three pillars of insurance: distribution, underwriting and claims to close the insurability gap for small and mid-size businesses. Our insurance process is 100% digital, allowing agents to rate, quote, and bind policies online in less than 5 minutes. Our robust coverages are written with the policyholder in mind, organizing coverage in the way policyholders experience damages: first-party loss, first-party expenses, third-party liability. Most importantly, every risk insight collected by Cowbell to underwrite an account is made available to the policyholder for full transparency and to allow them to remediate any risk exposures.
How is the explosion of ransomware attacks changing the cyber insurance industry?
Cyber claims have increased in frequency and severity challenging the profitability of cyber insurance providers. The explosion of ransomware attacks is the main reason behind this trend that is shaking up cyber insurance. Also overlooked are traditional underwriting methods where accounts are underwritten based on revenue and industry alone leading to a risk portfolio disconnected from the risk covered for many insurers. The problem has been compounded by the pandemic which accelerated business digitization and a work-from-home model which, without notice, increased the attack surface for many organizations.
Cowbell Cyber is part of a new generation of cyber insurers which applies a data-driven, technology-powered approach to cyber risk rating and underwriting while offering a portfolio of risk management resources for policyholders to continuously improve their organization’s risk profile. These continuous risk assessment capabilities allow Cowbell to stay up-to-date with the risks insured and to be proactive about loss control.
How does Cowbell’s solution differ from other cyber insurance programs on the market?
Many have attempted to innovate on one aspect of cyber insurance. Cowbell Cyber had much bigger ambitions from the beginning. Thanks to our combined talent pool of insurance, cybersecurity, and data science experts, we knew that the insurance process needed to be rebuilt from scratch to make a real difference for all stakeholders - policyholders, agents and brokers, and reinsurers.
By bringing technology, data, and AI to every step of the insurance process for cyber, Cowbell delivers a fully digital and superior experience to agents so that they can prepare customized quotes and issue relevant policies in 5 minutes or less. AI-assisted underwriting delivers precision and speed while eliminating human bias. A fully digitized process delivers clarity to policyholders while offering them unprecedented insights on their organization’s cyber exposures and how to eliminate them. Detailed risk metrics and insights are available to all, including reinsurers.
The Cowbell team is actively working on new programs to go further in our mission to keep businesses safe. In line with the New York Department of Financial Services framework for cyber insurers, we offer\ numerous resources (continuous risk assessment, risk insights, partner solutions) for policyholders to understand their risk exposures and be proactive about remediating security weaknesses.
What are some cybersecurity protocols that cyber insurers ask prospective policyholders to have in place? How is this bringing the cyber insurance and cybersecurity industries closer together?
When looking at how cyberattacks succeed, one quickly realizes that human errors or a lack of basic cybersecurity hygiene are often the culprits. Even more so in the small and mid-size market. The majority of cyber incidents could be avoided with multi-factor authentication in place. Backups provide options when dealing with negotiating a ransomware attack. Having an incident response plan is critical to know what to do or not do when a cyber crisis emerges. These are some of the most basic elements that should be in every cyber protection program.
Organizations need to mature to a point where they can manage their cyber risk like any other business risk, with what-if analysis and data to make informed decisions on where to invest in cybersecurity or transfer risk to an insurer. This is why the Cowbell team is keen on bringing together cybersecurity and cyber insurance efforts so that businesses can deploy a closed-loop approach to cyber risk management (Assess, Insure, Improve) to proactively and continuously reduce their risk exposures.
For more information about Cowbell, please visit: https://cowbell.insure/