What is SME Cyber Coverage?
SME Cyber Coverage
Cyber Security is vital for SMEs to ensure that their organization is protected with the appropriate cover in the event of a cyber-attack. Small and medium-sized enterprises (SMEs) are the backbone of the American economy. Due to the COVID-19 pandemic, these independent firms were forced to rely more on digital tools for communication and business purposes. Many SMEs were forced to adapt to cloud services, upgrade their websites, and implement measures that allowed staff to work remotely from home, as efficiently as possible. The need to improve cyber security is vital due to the inevitable increase in risk, which the pandemic has brought about. Low-security budget, lack of cyber-skills, and increase in cyber-attacks can seriously impact SME's abilities to implement adequate cyber security. Due to significant spikes in data breaches and ransomware attacks, it is critical that organizations are sufficiently protected with affirmative cyber cover.
The role of the reinsurer has become an essential cog in the cyber insurance machine. As the claims landscape has changed and picked up considerable pace, capacity has tightened and the market has run into a supply and demand problem. As a result, the requirement for alternative risk transfer is now more apparent than ever. Proportional treaties have become increasingly useful to support the cyber insurance market.
Why is Cyber Security Important for SMEs?
Several SMEs have limited resources to protect themselves from cyberattacks, which leaves them vulnerable to a series of data privacy and cybercrime issues. Cyber security ensures that SMEs are protected from data breaches that could permanently damage their reputation. The leaking of sensitive information online can be catastrophic for any company. Cyber-attacks can also destroy essential files or hardware, meaning that you would have to shut down the business temporarily. Adequate cyber security can help to ensure this doesn't happen. It is vital to always be prepared for cyber-attacks – companies who are not are more likely to lose important data, followed by a loss of income
Cyber security can help to protect your business from a malware attack. Malware is malicious software that is designed to damage a computer or server. There are several types of malware, including trojans, spyware, and viruses. The malware works by tricking a user into clicking on links which can then infect their computer.
Phishing scams are also becoming increasingly common for SMEs. Phishing is used to obtain sensitive information such as usernames, passwords, and credit card details. It is usually disguised as a trustworthy entity in electronic communication, such as an email.
Another area of concern for SMEs is ransomware – this is when private information is held at ransom. The ransomware will infect your computer, demanding a significant amount of money, via bitcoin, to regain access to encrypted files. But extortion has become more damaging recently, where DDoS attacks disrupt the regular flow of traffic to a server. Once the malware is in the system it can send multiple malicious traffic and overwhelm it. The final stage is often when cyber criminals are able to communicate with customers and stakeholders of an organization and harass them. So, it is imperative that businesses have the right security and coverage in place to assist in the remediation steps to get them to a functioning level again.
Does AM RE offer SME Coverage?
At AM RE, we utilize our primary SME cyber underwriting experience and longstanding relationships with MGAs to offer best-in-class support for cyber-SME products. Our cyber reinsurance policy can help to cover the cost of first and third party data breaches, business interruption losses and ransomware attacks. It can help cover the cost of restoring the network, ensuring minimal financial and reputational damage in the event of a data breach.
We work as a reinsurance intermediary, offering Property Casualty treaty reinsurance traditionally using a Quota Share model. As capacity tightens within the cyber market, we recognize that alternative solutions are required. AM RE can provide tailored approach to this class of business.