"Small businesses are as vulnerable, or more so, than enterprise organizations," says independent agent Robert Sargent. "However, many small businesses do not acknowledge their vulnerability."
Robert Sargent
Founder & CEO
Park City, Utah
How did you get started at your agency?
I initially worked in the actuarial department of a large property & casualty insurer. Much of the job involved developing predictive models, including writing code. I later moved to a product development and underwriter role in specialty lines. These experiences gave me a strong grounding in the intricacies of insurance underwriting, coverage and reserving, particularly for complex and untested products. I went on to start eSpecialty Insurance, a retail broker and technology company that applies technology to insurance distribution in errors & omissions, cyber and management liability.
Why cyber liability insurance?
Cyber insurance is a highly technical and complex coverage. Underwriting is increasingly focused on cybersecurity, which aligns well with my background.
Challenges in the cyber liability insurance market?
Small businesses are as vulnerable, or more so, than enterprise organizations. However, many small businesses do not acknowledge their vulnerability. For all organizations, cybersecurity has an increasing and significant impact on their insurance terms and pricing.
The coverage variability in the market has an impact on the policies being offered. There is no standardization in comprehensive policy forms, which is unlikely to change in the near future. Some insurers will likely continue to offer subpar coverage, creating challenges for agents trying to provide the right coverage for their clients.
Future trends?
Hackers have been and continue to remain one step ahead of cybersecurity professionals and varied attacks are likely to continue. I also believe that cyber insurance coverage will increasingly become a trading partner requirement and more small businesses will be contractually required to buy cyber insurance.
Given the complexity of the exposure and coverages, partnership opportunities between cyber insurance experts and retail agents and brokers are likely to develop. Using expert partnerships, agents and brokers will be able to deliver increased sales and improved customer outcomes in less time
Additionally, a market-wide underwriting response to systemic cyber risk could, in theory, create significant market dislocation, such as if a systemic loss in cyber insurance occurs where a single attack affects multiple policyholders simultaneously—leading to severe financial losses for the entire cyber insurance market.
Olivia Overman is IA content editor.
