What is cyber insurance?
In today’s digital age, cyber threats are becoming increasingly common, making it essential for companies to protect themselves against cyberattacks. Cyber insurance is a type of insurance policy that helps businesses manage this risk by providing them with coverage for a variety of types of damage stemming from data breaches and cyberattacks, including both first-party and third-party expenses.
This page will explain what cyber insurance is, the different types of cyber insurance policies available, and how the world of cyber insurance is changing.
Insurers offer a wide range of types of cyber insurance, which can cover various types of expenses that result from cybercrimes and other incidents. Broadly speaking, these types of insurance can be divided into first-party and third-party coverage. First-party cyber insurance covers the damages incurred by an insured business in the event of a cyberattack – including costs like data recovery, business interruption, and extortion payments. In contrast, third-party cyber insurance covers the damages incurred by third parties as a result of a cyberattack on an insured business – including costs like legal fees, compensation, and liability.
How is the world of cyber insurance changing?
The world of cyber insurance is rapidly evolving, with cyber threats becoming increasingly sophisticated, widespread, and expensive. Here are some ways the world of cyber insurance is changing:
- Increased demand. As cyber threats become more prevalent, the demand for cyber insurance is on the rise. Many companies are now making cyber insurance a part of their risk management strategy.
- Higher premiums. As businesses become increasingly aware of the need for cyber insurance, expensive cybersecurity dangers are making many insurance providers more hesitant to accept the risk of providing cyber insurance. This is pushing premiums higher and making it more difficult for many businesses to obtain cyber insurance.
- More restrictions. In addition to resulting in higher premiums, the growing cyber threat landscape is encouraging insurance providers to put more restrictions on the cyber insurance they provide. This includes setting higher cybersecurity standards for any company looking to obtain cyber insurance.
How does Five Sigma help cyber insurance companies manage claims efficiently and reliably?
While the growing risk of cybercrime continues to challenge cyber insurance providers, Five Sigma helps them manage claims both reliably and efficiently. Using machine learning, our data-driven claims management solution (CMS) simplifies the process of handling and resolving claims, while empowering claims adjusters to optimize their job performance. And our technology is designed to integrate with existing claims systems, making it easy for insurance companies to adopt it.
In addition to reducing claims cycle times and helping insurance providers minimize their loss adjustment expenses through streamlined claims management, Five Sigma helps claims adjusters to focus on the customer and deliver a superior customer experience. Among other innovative capabilities, our embedded omnichannel communication module automatically documents and analyzes both outgoing and incoming communications. It even offers claims adjusters the option of using prewritten messages, helping them communicate with insured customers effectively, reliably, and quickly.
With capabilities like those, Five Sigma’s technology enables claims departments to improve their processing times, reduce costs, and provide better customer service.Back to Glossary