Cyber insurance has largely been confined to the commercial insurance market. Yet with individuals becoming increasingly connected and reliant upon technology for day-to-day activities, the need for personal cyber protection is growing. Mercury Insurance is the latest to spot this need.
Although in its infancy and largely restricted to the high net worth space as a personal insurance product, the consensus throughout the market appears to be that packaging cyber protection alongside a home insurance policy is the best approach to grow the personal lines market.
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To this end, Mercury Insurance has launched Home Cyber Protection Coverage. The cyber element of the policy provides cover for connected home devices. With individuals becoming increasingly aware of the cyber risks they face, providing cover will help ease concerns and could lead to growth in the uptake of devices.
An increase in the number of connected devices will create an opportunity for insurers to incorporate the technology into home insurance as a way to prevent claims from occurring. Findings from GlobalData’s 2018 UK Insurance Consumer Survey highlight that there is still a long way to go before insurers realise the benefits such devices can bring.
Escape of water claims are a longstanding challenge for the home insurance market. From insurers’ perspective, a water leak detection device would arguably be the most beneficial of the connected devices available. However, only 7.2% of home insurance policy holders have such a device in place.
Providing cyber insurance that extends cover to connected devices could help increase the uptake of technology amongst consumers. The hope is that such devices will prevent or reduce the severity of claims, in turn allowing insurers to offer lower premiums to individuals who have the technology in place.
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By GlobalData
