With Cowbell Prime 250, Cowbell Cyber has reached a new, exciting milestone: We are inventing cyber insurance new, insuring businesses of up to $250m in revenue with a breadth of coverage, clarity, and speed. Developing a product like this not only takes time but also expertise from all departments. Caroline Thompson, Cowbell’s Head of Underwriting, is the best example of this. If you want to learn more about the process of underwriting cyber for Cowbell Prime, and getting it admitted in new states, keep on reading.
You were underwriting cyber at Zurich Insurance before joining Cowbell. What made you switch to a start-up?
The insurance industry is known to move towards innovation and creativity at a much slower pace. I think some organizations move faster than others but what I saw the insurtech aiming to achieve was lightyears ahead. Something inside of me knew I had to be a part of building something from the ground-up and that is why I reached out to Jack Kudale, Cowbell’s founder and CEO. While I had gained a lot of knowledge from my previous underwriting roles I wanted my next move to be a role where I could wear a couple of different hats and exercise the creative part of my brain as well.
You have been in the insurance industry all your working life. Is cyber different from other insurance lines?
The threat landscape and therefore the cyber risks that need to be covered change all the time. Try comparing a policy bound 5 years ago to one bound today for the same company. If they had a good broker fighting for the best in class coverage you would see that there have been many enhancements over the years. The cyber insurance industry has to keep up with technology innovations and hackers’ expertise and creativity. There will continue to be new technologies coming out and cyber policies will always have to keep up in how to address the new risk.
Part of your job is making sure that Cowbell and our cyber insurance products get admitted in states across the U.S. What is the process and the challenges that come with it?
It has been a wonderful experience so far working with an admitted product but there are, of course, challenges. Cowbell Prime 250 is already admitted in a dozen states with a goal to rapidly get to all 50 states. With an admitted product, one has to think ahead and make sure we have incorporated as much as we wanted to accomplish into the filing. The company needs to basically be 10 steps ahead of what it plans to offer to policyholders.
The first time a business files a claim should not be the first time they hear from their insurer.
What is the biggest challenge when underwriting for cyber insurance? And contrarily, what aspect is easier than expected?
Underwriters are scrambling to come to conclusions based on application answers and limited information available about a company’s cybersecurity hygiene. Underwriters often have to manually pull from several different sources of data. Here at Cowbell, we have built an integrated solution that brings together these different sources into one platform. This makes the underwriter’s job easier. It’s a significant gain in time and accuracy.
There’s a lot more to it: first, with lots of data, you can start to automate some processes and refine underwriting decisions but also ensure consistency of decisions. Secondly, with a modern cloud-based platform, you can also pull data in real-time and automatically and get much better visibility into an organization’s security posture. Combining cyber insurance with modern technologies and AI has allowed us to check all the attributes that define Cyber Insurance 2.0: clarity, flexibility, relevancy, and speed.
As an underwriter, is there one thing you would want technology to provide you?
Technology should help overcome the lack of claims data. There isn’t enough historical claims data to know how potential losses will look but I do believe AI should be able to use predictive analytics and the historical data along with media about cyber attacks to come up with information that everyone, brokers, insurers, and reinsurers should feel comfortable building into actuarial models.
If you had one advice to provide businesses when they look for cyber insurance, what would it be?
Look for a carrier that provides more than a policy and can be a partner throughout the term of your policy. Cyber threats and technology change all the time and cyber insurance needs to come with on-going adjustment and continuous feedback. In addition, businesses should be provided with insight and education by their cyber carrier. I believe that it isn’t only a product but there is a service component involved. Most importantly, the first time a business files a claim should not be the first time they hear from their insurer.
In addition to compelling cyber coverages, Cowbell provides value to policyholders on day one and every day after. With continuously updated risk ratings (Cowbell Factors) and recommendations (Cowbell Insights) to remediate security weaknesses, companies can start to proactively identify and address cyber risks.
Is there anything else you would like to mention?
Opportunities abound in cyber insurance. This is a new, emerging field with high growth potential. We need to grow the pool of talent contributing to this market across all functions: underwriting, actuarial, sales, customer support and more. I would invite every young professional to take a close look at cyber insurance and join us in this very exciting journey of defining a new market.
If you’d like to know more about Cowbell, please read about our Cowbell Prime 250 offering.