Cyber Risk

Academy Advises Brokers on Cyber Risk

The Travelers Cyber Academy offers free training for brokers that work with small and mid-sized clients, where risk is on the rise.
By: | October 7, 2016 • 4 min read

Travelers has launched a project to help agents and brokers to provide more thorough cyber advice for small and medium enterprises, where the risk of attack is on the rise.

Advertisement




The Travelers Cyber Academy offers free training for brokers and agents, while opening the possibility for buyers to participate as well, under invitation from their insurance partners.

The project is composed of eight webinars where both in-house experts and cyber security aces from outside the insurance industry strive to explain, in an accessible way, the pitfalls of the cyber world and how SMEs should deal with them.

“Customers are asking questions, and many agents have some degree of understanding and expertise, but they would like to have some more,” said Tim Francis, enterprise cyber lead at Travelers.

Tens of thousands of invitations were sent for the first lesson in September, and the response by the targeted public has been more enthusiastic than to previous educational initiatives, the company said.

Drawing from data by Symantec, Travelers points out that small companies account for 43 percent of all cyber attacks against business, and for 22 percent of attacks against mid-sized enterprises.

Cyber risks rank in the top five risks feared by American SMEs, according to a survey by Zurich Insurance Group.

Tim Francis, enterprise cyber lead, Travelers

Tim Francis, enterprise cyber lead, Travelers

Francis said that, although the understanding of cyber risks by large brokers and corporations has progressed considerably in recent years, expertise about the subject among smaller brokers and their clients remains a work in progress.

“As the cyber industry has grown, many of the agents that service clients with cyber coverages are sometimes a little behind in terms of understanding exposures and translating them to their customers,” he said.

Contacts with agents and customers alike revealed that the appetite for knowledge in this particular area is increasing. However, the educational material currently available often falls short of the needs of this particular public.

Francis mentions the example of ransomware, the subject of the second webinar offered by the Travelers Cyber Academy. It’s an emerging threat where hackers paralyze a business by locking its IT systems until a ransom is paid, but while the wealth of literature on the subject thrills the IT community, it more often than not sounds like Greek to everyone else.

“There is no shortage of whitepapers on the topic of ransomware. But they are either very technical or so high level that they do not deliver much information for customers,” Francis said.

“We feel that we can help to provide deeper understanding about such a topic, without the need for being a cyber security expert in order to understand what is talked about.”

The series of webinars runs from September to May, and Travelers expects to offer it again in subsequent years, first in the U.S. alone, but maybe in other countries as well in the future. If a participant misses a section, it can be watched later as the webinars will be kept available online for registered users.

Agents will also be able to introduce the training sessions to customers with particular interests in the area.

“All businesses are today in the line of fire.” — Vinny Troia, certified ethical hacker

The initiative was launched with a session on the so-called dark web, an obscure side of the internet where hackers and criminals enjoy high levels of anonymity to pursue their bad deeds. With succinct explanations and infographics, the session tackles complex materials such as the workings of TOR, the browser developed by the U.S. military that is used to keep dark web activities out of the reach of the authorities.

Vinny Troia, a certified ethical hacker, described ransomware in the video as “a business to ruin your business.”

He provides tips such as how to train employees to avoid spear phishing attacks.

“All businesses are today in the line of fire,” Troia said in the video.

In forthcoming webinars, other invited speakers will elaborate on subjects like the forensics of cyber risks, the legal cyber environment, data breaches and so on.

Advertisement




“We are also adding our own expert input, not only from our underwriting team, but also from a member of the teams that support and service claims and underwriting,” Francis said. Travelers’ cyber team includes professionals with different backgrounds such as law enforcement, FBI forensic investigations and cyber security.

He pointed out that a challenge for the project will be to keep up with developments in a field where the risk is evolving at a thunderous pace.

“We can modify the curriculum to accommodate events or issues that we have not anticipated,” Francis said.  “In the world of cyber security, things change so fast that a presentation made today could become obsolete very soon, or a new issue could be on top of everybody’s minds a month from now.”

Rodrigo Amaral is a freelance writer specializing in Latin American and European risk management and insurance markets. He can be reached at [email protected]

Lead Story

Improving the Claims Experience

Insureds and carriers agree that more communication can address common claims complaints.
By: | January 10, 2018 • 7 min read

Carriers today often argue that buying their insurance product is about much more than financial indemnity and peace of mind.

Advertisement




Many insurers include a variety of risk management services and resources in their packages to position themselves as true risk partners who help clients build resiliency and prevent losses in the first place.

That’s all well and good. No company wants to experience a loss, after all. But even with the added value of all those services, the core purpose of insurance is to reimburse loss, and policyholders pay premiums because they expect delivery on that promise.

At the end of the day, nothing else matters if your insurer can’t or won’t pay your claim, and the quality of the claims experience is ultimately the barometer by which insureds will judge their insurer.

Why, then, is the process not smoother? Insureds want more transparency and faster claims payment, but claims examiners are often overburdened and disconnected from the original policy. Where does the disconnect come from, and how can it be bridged?

Both sides of the insurer-insured equation may be responsible.

Susan Hiteshew, senior manager of global insurance and risk management, Under Armor Inc.

“One of the difficult things in our industry is that oftentimes insureds don’t call their insurer until they have a claim,” said Susan Hiteshew, senior manager of global insurance and risk management for Under Armour Inc.

“It’s important to leverage all of the other value that insurers offer through mid-term touchpoints and open communication. This can help build the insurer-insured partnership so that when a claim materializes, the relationships are already established and the claim can be resolved quickly and fairly.”

“My experience has been that claims executives are often in the background until there is an issue that needs addressing with the policyholder,” said Dan Holden, manager of corporate risk and insurance for Daimler Trucks North America.

“This is unfortunate because the claims department essentially writes the checks and they should certainly be involved in the day to day operations of the policyholders in designing polices that mitigate claims.

“By being in the shadows they often miss the opportunity to strengthen the relationship with policyholders.”

Communication Breakdown

Communication barriers may stem from internal separation between claims and underwriting teams. Prior to signing a contract and throughout a policy cycle, underwriters are often in contact with insureds to keep tabs on any changes in their risk profile and to help connect clients with risk engineering resources. Claims professionals are often left out of the loop, as if they have no proactive role to play in the insured-insurer relationship.

“Claims operates on their side of the house, ready to jump in, assist and manage when the loss occurs, and underwriting operates in their silo assessing the risk story,” Hiteshew said.
“Claims and underwriting need to be in lock-step to collectively provide maximum value to insureds, whether or not losses occur.”

Both insureds and claims professionals agree that most disputes could be solved faster or avoided completely if claims decision-makers interacted with policyholders early and often — not just when a loss occurs.

“Claims and underwriting need to be in lock-step to collectively provide maximum value to insureds, whether or not losses occur.” – Susan Hiteshew, senior manager of global insurance and risk management for Under Armour Inc.

“Communication is critically important and in my opinion, should take place prior to binding business and well before a claim comes in the door,” said David Crowe, senior vice president, claims, Berkshire Hathaway Specialty Insurance.

“In my experience, the vast majority of disputes boil down to lack of communication and most disputes ultimately are resolved when the claim decision-maker gets involved directly.”

Talent and Resource Shortage

Another contributing factor to fractured communication could be claims adjuster workload and turnover. Claims adjusting is stressful work to begin with.

Advertisement




Adjusters normally deal with a high volume of cases, and each case can be emotionally draining. The customer on the other side is, after all, dealing with a loss and struggling to return to business as usual. At some TPAs, adjuster turnover can exceed 25 percent.

“This is a difficult time for claims organizations to find talent who want to be in this business long-term, and claims organizations need to invest in their employees if they’re going to have any success in retaining them,” said Patrick Walsh, executive vice president of York Risk Services Group.

The claims field — like the insurance industry as a whole — is also strained by a talent crunch. There may not be enough qualified candidates to take the place of examiners looking to retire in the next ten years.

“One of the biggest challenges facing the claims industry is a growing shortage of talent,” said Scott Rogers, president, National Accounts, Sedgwick. “This shortage is due to a combination of the number of claims professionals expected to retire in the coming years and an underdeveloped pipeline of talent in our marketplace.

“The lack of investment in ensuring a positive work environment, training, and technology for claims professionals is finally catching up to the industry.”

The pool of adjusters gets stretched even thinner in the aftermath of catastrophes — especially when a string of catastrophes occurs, as they did in the U.S in the third quarter of 2017.

“From an industry perspective, Harvey, Irma and Maria reminded us of the limitations on resources available when multiple catastrophes occur in close succession,” said Crowe.

“From independent and/or CAT adjusters to building consultants, restoration companies and contractors, resources became thin once Irma made landfall.”

Is Tech the Solution?

This is where Insurtech may help things. Automation of some processes could free up time for claims professionals, resulting in faster deployment of adjusters where they’re needed most and, ultimately, speedier claims payment.

“There is some really exciting work being done with artificial intelligence and blockchain technologies that could yield a meaningful ROI to both insureds and insurers,” Hiteshew said.

“The claim set-up process and coverage validation on some claims could be automated, which could allow adjusters to focus their work on more complex losses, expedite claim resolution and payment as well.”

Dan Holden, manager, Corporate Risk & Insurance, Daimler Trucks North America

Predictive modeling and analytics can also help claims examiners prioritize tasks and maximize productivity by flagging high-risk claims.

“We use our data to identify claims with the possibility of exceeding a specified high dollar amount in total incurred costs,” Rogers said. “If the model predicts that a claim will become a large loss, the claim is redirected to our complex claims unit. This allows us to focus appropriate resources that impact key areas like return to work.”

“York has implemented a number of models that are focused on helping the claims professional take action when it’s really required and that will have a positive impact on the claim experience,” Walsh said.

“We’ve implemented centers of excellence where our experts provide additional support and direction so claim professionals aren’t getting deluged with a bunch of predictive model alerts that they don’t understand.”

“Technology can certainly expedite the claims process, but that could also lead to even more cases being heaped on examiners.” — Dan Holden, manager, Corporate Risk & Insurance, Daimler Trucks North America

Many technology platforms focused on claims management include client portals meant to improve the customer experience by facilitating claim submission and communication with examiners.

“With convenient, easy-to-use applications, claimants can send important documents and photos to their claims professionals, thereby accelerating the claims process. They can designate their communication preferences, whether it’s email, text message, etc.,” Sedgwick’s Rogers said. “Additionally, rules can be established that direct workflow and send real time notifications when triggered by specific claim events.”

However, many in the industry don’t expect technology to revolutionize claims management any time soon, and are quick to point out its downsides. Those include even less personal interaction and deteriorating customer service.

While they acknowledge that Insurtech has the potential to simplify and speed up the claims workflow, they emphasize that insurance is a “people business” and the key to improving the claims process lies in better, more proactive communication and strengthening of the insurer-insured relationship.

Additionally, automation is often a double-edged sword in terms of making work easier for the claims examiner.

“Technology can certainly expedite the claims process, but that could also lead to even more cases being heaped on examiners,” Holden said.

“So while the intent is to make things more streamlined for claims staff, the byproduct is that management assumes that examiners can now handle more files. If management carries that assumption too far, you risk diminishing returns and examiner burnout.”

Advertisement




By further taking real people out of the equation and reducing personal interaction, Holden says technology also contributes to deteriorating customer service.

“When I started more than 30 years ago as a claims examiner, I asked a few of the seasoned examiners what they felt had changed since they began their own careers 30 year earlier. Their answer was unanimous: a decline in customer service,” Holden said.

“It fell to the wayside to be replaced by faster, more impersonal methodologies.”

Insurtech may improve customer satisfaction for simpler claims, allowing policyholders to upload images with the click of a button, automating claim valuation and fast-tracking payment. But for complex claims, where the value of an insurance policy really comes into play, tech may do more harm than good.

“Technology is an important tool and allows for more timely payment and processing of claims, but it is not THE answer,” BHSI’s Crowe said. “Behind all of the technology is people.” &

Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]