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Protecting businesses from cyber risk requires a new approach

Coalition Active Alerts

Today’s advanced technologies can speed up processes, increase agility and spark growth, providing businesses with greater opportunities to make an impact. But with great opportunity comes great risk.

In the digital world, threats are also fast and nimble, and the effects of these digital risks can be severe, in many cases amplifying other traditional risks across the business.

Cyber threats used to be just one of many risks companies faced, but with technology playing such an extensive role in nearly every modern organization, digital risks have risen to the top. And rightfully so. Claims frequency, severity and cost are all on the rise. In 2022, cyber risk = business risk.

Cyber threats are pervasive, amorphous and hard to predict. Ransomware attacks, for example, are not only occurring daily and increasing in frequency, but becoming more complex, demanding more payments. Last year, the average ransom demand made to our policyholders was $1.8 million and cyber claims cost rose 56%, to an average of $149,000 per small business.

Unfortunately, many businesses aren’t protecting their networks as well as they could to thwart bad actors. The one-and-done patches that used to do the trick, such as purchasing antivirus software and implementing firewalls, are no longer sufficient. Companies must be able to proactively identify and neutralize threats to their network.

An active way to protect your business

Insurance is supposed to provide peace of mind, but traditional insurance falls short because it wasn’t built for a digital world. It relies only on historical data, which makes it impossible to see risks in real time; it doesn’t engage with policyholders frequently enough to keep pace with evolving threats; and it inaccurately assumes digital risk is a problem for technical teams.

Continuing to use this old model is a risk in itself. As cyber attacks become more sophisticated, greater amounts of data are being compromised and there’s no sign of action on the dark web slowing down anytime soon. Businesses need a new way to protect themselves — a way that’s proactive, flexible and smart.

Active Insurance is that new way. It’s a coverage model built for the digital economy that combines the power of technology and insurance to help organizations accurately assess, monitor and respond to a new class of risks. Active Insurance’s three-pronged approach — Active Risk Assessment, Active Protection, and Active Response — gives businesses the peace of mind they expect from insurance.

With Active Risk Assessment, businesses receive a personalized digital risk profile that, in near-real-time, reveals their external facing digital risk exposures and vulnerabilities. In addition to making policyholders’ organizations more secure, Active Risk Assessment help brokers avoid mistakes in pricing and underwriting cyber and executive risks, while also considerably shortening the quoting process time.

Active Protection continuously monitors policyholders’ digital systems to spot and mitigate risk before it strikes. Automated notifications help insureds and brokers stay informed of these risks as well as any changes that occur. Active Protection also includes personalized support and guidance to address technical questions or quickly update policy information.

No one wants a cyber incident to occur, but if it does, the third arm of Active Insurance, Active Response, can help organizations recover quickly so they can get back to business. Coalition’s in-house team of experts — Coalition Incident Response (CIR) — helps policyholders rapidly solve the issue and, often, recover what’s been lost. In 2021, the Coalition Control team was able to recover 83% of stolen funds.

Cyber criminals are innovative, which means the measures businesses put in place to protect themselves need to be just as innovative. Active Insurance helps fill the gaps that traditional insurance has left wide open, letting policyholders focus on what’s most important: successfully running their business.

For more insights and information on Active Risk Assessment, download our Broker's Guide to Active Insurance today.