Cyber exposures are no longer confined to technology firms. As data breaches and digital threats intensify, sectors such as healthcare, life sciences, and financial services are seeing especially strong demand for cyber coverage.
According to Marianne McKinnon (pictured), underwriting manager for technology, cyber and E&O at Victor Canada, these industries are not only purchasing more policies but also requesting higher limits, reflecting both contractual obligations and the growing severity of risks.
Healthcare and life sciences organizations sit at the top of the demand curve due to the sensitivity of the information they hold. McKinnon noted that clients in these industries are seeking higher limits, often because contracts now require more protection.
“Not only are we seeing the demand for insurance and for cyber insurance in particular, because of the nature of the data that they’re handling, we’re seeing increased limit requests,” she said.
The financial sector is also driving demand as services digitize and fintech players expand their footprint. Insurers themselves are mandating that brokers carry cyber coverage, acknowledging the interconnected nature of exposures.
McKinnon stressed that “every commercial enterprise has a cyber exposure… as no one is doing business with only pen and paper anymore.”
Even as demand for cyber insurance rises, insurers are grappling with the cost side of the equation. Established carriers have built robust, sophisticated products that cover a wide range of exposures. But these policies are being drawn on more frequently as claims grow in both number and cost, McKinnon said. Cybercrime, fraudulent payment transfers, and notification expenses are proving especially expensive.
To stay ahead of the curve, underwriters are adjusting pricing models to reflect these realities, she added.
“We have to take the steps necessary to price those coverages accordingly, because we know that they’re going to be a target for claims,” McKinnon said. For long-standing players, the challenge is to strike a balance between keeping products competitive and ensuring premiums align with claims history and loss data.
That balance is complicated by competitive pressure. New and emerging carriers entering the cyber market – or existing insurers trying to expand their footprint – are sometimes underpricing products or paring back coverage in order to win business, McKinnon explained.
While such policies may look attractive to clients on cost, they may not provide the same level of protection as more established offerings, she added.
This creates a communications challenge for experienced carriers and their brokers. Clients must understand not just the price differences between policies, but also the gaps that may exist in coverage. As McKinnon noted, the goal is to ensure that insureds carry “a robust cyber program” that can stand up to the realities of today’s threat environment, rather than one that simply looks affordable at first glance.
While large enterprises continue to drive demand, small and mid-sized businesses are also recognizing the need for cyber protection. McKinnon said communication and education are paying off, with brokers becoming more comfortable selling cyber insurance and more aware of its importance. The challenge now, she noted, is ensuring that the products offered are truly sufficient for client needs and not simply attractive on price.
For brokers, this means stepping into the role of risk advisors. McKinnon emphasized that “a company is only as sophisticated as its weakest link in terms of cyber hygiene,” and that often comes down to employees. She said that employee awareness, training, and prevention strategies should be central to any cyber risk management discussion.
Beyond selling policies, brokers need to help clients adopt risk mitigation practices that will ultimately reduce exposures. “A lot of brokers take on the role of risk advisors for their clients… making sure that they’re constantly promoting risk management and prevention, employee education and awareness,” she said. These factors also influence underwriting decisions, underscoring the link between strong prevention and favorable coverage.
Looking ahead, McKinnon pointed to data analytics and artificial intelligence as tools that can help brokers refine this role. But she stressed that technology should be seen as part of a broader push for proactive risk management.
“There’s a clear sign that if you’re not moving ahead, you’re falling behind,” she said, adding that the key to staying ahead is continuous improvement in cyber hygiene and liability risk prevention.
