Insurers see growth potential for cyber in personal lines market

By Erin Ayers on April 10, 2017

As interest in cyber coverage from commercial organizations ramps up and concerns grow over the security of internet-connected devices, the insurance industry hopes to expand the market to individuals facing cyber risk.

While identity theft products have existed in personal lines for many years, several insurers have recently introduced coverage that responds to cyber extortion, breach notification costs, financial fraud, personal cyber liability, and cyber bullying. NAS Insurance, American International Group (AIG), and Hartford Steam Boiler (HSB) are among those companies targeting personal lines customers as potential buyers of cyber insurance. The industry may find itself boosted by the vulnerability-riddled smart devices, ransomware demands aimed at individuals and consumer privacy concerns.

HSB has partnered with homeowners insurers to offer identity theft protection services for many years and has now expanded its offerings to include coverage to remove malware from computers and routers; cyber extortion coverage with assistance on ransomware; data breach services; online fraud; and coverage for attacks on smart home systems.

Insurers emphasize the increasing threat to consumers and unexpected costs.

“As our lives are more connected, cyber threats are ever more present,” said Natalie Kelly, NAS’ senior vice president of claims, in a statement. “Expenses incurred by victims of cyberbullying, for example, can be devastating. In addition to the emotional toll of cyberbullying, the counseling expenses, lost wages, or even the costs to switch schools can add up quickly. And, as wire transfer fraud schemes become more sophisticated, individuals are more likely to be victimized by cybercriminals and incur significant losses.”

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eayers@advisen.com'

Erin is an editor at Advisen. She has 15 years of journalism experience. Prior to Advisen, Erin covered property-casualty insurance for 13 years as editor-in-chief of The Standard, New England’s Insurance Weekly. Erin is based in Boston, Mass. Contact Erin at eayers@advisen.com.