What to expect from a modern cyber policy…Nigeria ranks low in insurance penetration in Africa

What to expect from a modern cyber policy

Compiled by Insurance24

HARARE,  With hacking incidents continuing to occur with increased regularity, cyber is one of the hottest topics in the insurance industry. High profile breaches have helped boost an already burgeoning market space and insurers are scrambling to launch modern policies that have the potential to be scaled up.

As a result of the growth in cyber, more insurance companies are moving into the space in an attempt to claim a share of the market. Brokers and agents have more options than ever before, but that isn’t necessarily a good thing – new insurers entering the space often lack the expertise to effectively handle a serious cyber claim.

Getting the right policy in place is crucial because any gaps in coverage could prove to be catastrophic. But what exactly should brokers and agents be looking for when presenting cyber options to their clients?

Designed for small and midsize businesses with up to $250 million in revenue, and also available on a case by case basis for companies with higher revenues, NAS’s NetGuard Plus cyber liability policy provides insureds with a full suite of data security and privacy solutions that can be custom-tailored for each client’s business.

“The policy offers full limits on privacy breach response, network protection and voluntary notification,” explains Jeremy Barnett, senior vice president of marketing at NAS Insurance Services. “The cyber crime sub-limit is now available up to $250,000 and includes coverage for financial fraud, phishing attacks and telecommunications fraud. NetGuard also features dependent business interruption, which covers losses in the event that the computer system of an IT service provider or business process outsourcing provider goes down.”

Third party cyber claims are on the rise and NAS has built in many features to mitigate such losses. The multimedia liability portion of the policy defends against third party claims alleging copyright/trademark infringement, libel, slander, plagiarism and personal injury resulting from the dissemination of media material. It covers both electronic and non-electronic media material.

The security and liability part of policy covers third party claims alleging liability resulting from a

wrongful act related to security or privacy. “That includes failure to safeguard either electronic or non-electronic confidential information or failure to prevent virus attacks,” Barnett says. “Failure to prevent things like denial of service attacks or the transmission of malicious code from the insured’s computer system to the computer system of a third party is also covered by the policy.”

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Nigeria ranks low in insurance penetration in Africa

HARARE, Nigeria’s  insurance penetration of 0.4 percent has been described as one of the lowest  in Africa.

Editorial Board Member of Nation Newspaper, Mr. Sanya Oni,  stated this while speaking on the topic, “The role of media in deepening insurance penetration,” at a Joint industry media retreat for insurance correspondents in Ijebu-Ode.

Oni said that the nation’s insurance penetration of 0.4 percent figure makes its insurance sector a non-starter compared with South Africa with 16.9 percent   and Kenya with 2.9 percent penetration respectively.

He  said, “Compared with South Africa’s 16.9 percent and Kenya’s 2.9 percent, Nigeria’s insurance penetration, variously put at between 0.3 to 0.4 percent makes the insurance sector a non-starter. Even worse is that only one percent of the Nigerian population holds any form of insurance policy.

Considering that the industry which started in 1921 is actually older than those of China, India and Malaysia, we must worry given the vast advances in insurance practices in those climes, why things have remained in the current sorry state.

” According to him, things are not what they ought to be, adding, “First, we see the rules of industry and codes of self regulation increasingly set aside. The most obvious one in this regard is rate cutting.

The result is the unhealthy price competition which ensures that less than 50 percent of their expected earning actually comes into the coffers despite the enormous risk borne by the insurance companies.

“Before now, we knew of the roles of Offices Committee in setting industry wide premiums. Once upon a time, the offices committee which every insurance company as members of NIA belong, and its self regulatory mechanism, has been slowly and steadily eroded.

In other words, the rules and conventions attenuating has long been jettisoned. Fire for instance which used to be charged at 0.2 percent minimum is currently 0.08 percent.

How does the industry survive given that the cost environment is actually spiralling upwards not going down?” Oni noted that the situation of the Nigeria’s insurance penetration is worrisome and as such requires urgent attention for a better tomorrow.

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