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4 Ways Agents Can Protect Clients from Cyber Security Threats

SEP. 30, 2020
  • Nationwide’s Agent Authority research identifies opportunities for agents to increase engagement with clients around cyber vulnerabilities as behaviors evolve
  • Small business owners are underprepared and overconfident, while middle market business owners have a better handle on cyber threats
  • Agents are vital in helping clients understand cyber risks, including new and evolving threats

As COVID-19 drives more consumers and business owners to rely on virtual or digital interactions, cyber criminals have found fertile hunting ground for new opportunities to exploit weaknesses. Nationwide’s latest Agent Authority research uncovered many American consumers and businesses are dangerously underprepared to defend against common and evolving cyber threats.

Although middle market business owners displayed a generally firm handle on cyber threats and best practices, small business owner and consumer responses told a different story. Despite nearly half of cyber attacks targeting small businesses, just over one-third (37%) of small business owners reported believing they’re at risk to be a target. Similarly, consumers underestimate their cyber risk and are unaware of what it would take to recover from a cyber attack.

Agents have an opportunity to strengthen relationships and customer confidence, as well as drive sales, by proactively engaging clients about cyber vulnerabilities and sharing resources to keep them prepared. Our Agent Authority research points to four themes agents can leverage to help respond to evolving client cyber needs:

1. Help small business clients better recognize cyber vulnerabilities

Small business owners are underprepared for cyber threats as nearly half (48%) say they haven’t secured their networks and 53% say they do not offer cyber security training to their employees at all. Further, fewer than 1 in 5, have cyber liability insurance to help them recover if an attack occurs.

  • Half or fewer of business owners are implementing what are considered best practices around securing their technology.
  • While nearly half of small business owners believe they’re prepared to handle a cyber attack, only 39% of independent agents believe that their customers are prepared to prevent one.
  • Alarmingly, about one-third of business owners are not confident they could recover if their business was attacked.

Make sure cyber security is part of your next conversation with small business clients. Approximately 8 in 10 agents say many of their clients are unsure of how they are exposed to cyber security risks, they lack knowledge, and they believe the chance they can fall victim is small. If your clients are part of the 83% without cyber insurance, open discussions with them about cyber threats and what is covered in a cyber insurance policy, and bring some options to the table.

2. Reinforce middle market customers’ cyber attack prevention

Our research shows middle market businesses, which typically have more sophisticated operations, have a greater awareness and are more prepared for cyber threats compared to small businesses. Their confidence may be warranted, as they’re more likely to take security precautions and 7 in 10 say they’ve purchased cyber security insurance.

  • Seven in 10 (70%) middle market business owners are concerned about a cyber attack, and 79% feel they are well prepared to address one.
  • 80% are confident in their ability to recover from an attack

This audience also shared a strong confidence in their agents as 7 in 10 indicate they trust their agent to provide insurance counsel on cyber threats. To keep middle market businesses confident and up to date on new or changing exposures, lean on your carrier partners for cyber security loss control resources to share and make a point to discuss evolving operations and potential coverage gaps.

3. Educate personal lines clients on the repercussions of a cyber attack

Consumers showed quite limited knowledge which likely contributes to poor preparation for potential cyber attacks. The research shows many also don’t take cyber threats seriously enough as only 1 in 3 said they feel prepared for an attack and roughly 1 in 10 has some type of cyber coverage.

  • About 2 in 5 consumers lack adequate knowledge of common risks. Only 62% reported being knowledgeable about ID theft, 56% about malware, and 57% about phishing.
  • Only half believe they could recover at all from an attack and 4 in 10 don’t know how much it would cost them to recover.
  • Of those who have experienced an attack, 30% reported that it impacted their personal finances.

Help your personal lines clients recognize common cyber attack methods and understand the repercussions associated with an attack, including the time and money. Compare and contrast that with the cost of personal cyber protection.

4. Offer regular cyber security counsel to clients as needs and threats change

Offering effective counsel to clients to protect against cyber risks, including new and evolving threats that may remain off others’ radar, can help insurance agents strengthen relationships and deliver peace of mind to customers. Our research shows there are opportunities for agents to broach cyber topics more often as only about half (52%) of agents say they talk to their customers often or always about cyber threats.

  • Nearly half of agents say they are familiar with emerging cyber threats, including Internet of Things security breaches (58%), mobile point of sale malware (58%), Denial of Service attacks (53%), or deep fakes (47%). Some agents may need more education on cyber security to effectively discuss protection options with their clients.
  • While 84% of insurance agency principals say they provide plenty of resources to their employees, only 61% of producers and 42% of customer service reps agree, suggesting there’s room for improvement in dissemination of information to all agency employees.

You may benefit from reexamining how your agency shares information with colleagues and clients about cyber risks. The Agent Authority data shows there’s a solid opportunity to strengthen relationships and drive new sales.