Consumer cyber protection in the age of digital dependence

Cyber extortion, identity theft, and bullying — as more parts of our lives move online, consumers face any number of cyber risks.

To protect consumers against these risks, Marsh developed an embedded micro-cyber insurance programme, which can be used by organisations across a broad range of sectors. For example, a financial services, telecommunications, or consumer electronics company may be interested to offer the insurance to consumers at the point of sale, with the option to charge a small monthly fee after a promotional period.

The programme not only allows consumers to manage their cyber risks but also leads to a boost in consumer confidence due to having the relevant cyber protection in place. For the organisation, the programme provides the opportunity to strengthen brand loyalty, upsell to consumers in the future, and differentiate their product in a competitive marketplace.

How the embedded micro-cyber insurance programme works

Ransomware, phishing, and malware attacks on home computers are increasingly common. For example, cybercriminals may trick people into revealing sensitive information via email purportedly coming from a trusted source, such as a bank, other reputable company, or government organisation. Bad actors also target gamers, who are at risk of having their service interrupted and data exploited.

After identifying the most frequent of these personal cyber risks, Marsh bundled insurance coverage for them into an embedded micro-cyber insurance product that can be given away at purchase for a limited promotional period, and extended for a small fee — less than $1 a month, thereafter.

The embedded micro-cyber insurance programme offers elements of the kind of cyber protection often provided in the workplace to individuals.

Depending on the variation of risk attached to the consumer profile, the programme covers:

Cyber bullying and online violation of privacy or reputation: Cost incurred for counselling and fees to treat stress, anxiety, or other medical conditions resulting from cyber bullying. Also covers the costs for expenses incurred to remove or de-index defamatory material.
Cyber viruses: Costs incurred to remedy impairment of devices or loss of data as a result of malicious software. These costs can include repair, device replacement, or cash settlement.
Cyber extortion: Ransom payment, as legally permissible. Administrative and out-of-pocket expenses for restoring data and decrypting files.
Online money theft: Loss resulting from unauthorised transactions as a result of unapproved online use of payment cards, bank accounts, and electronic wallets where refused for reimbursement by the bank.
Identity theft: Monetary loss as a direct result of identity theft, including wage loss and fees to restore identity. Costs incurred to treat stress, anxiety, and other similar medical conditions as a consequence of identity theft are also covered.
Online account theft: Economic loss resulting from theft from a gaming or e-commerce platform online account.
Failure to deliver goods purchased online: Material and direct damage suffered due to non-delivery or incomplete supply of goods — including shipping costs — plus damage to goods, if the relevant refund is not made.
Legal costs: Legal costs and expenses to defend yourself and take action in a regulatory proceeding related to cybercrime.

The target market of micro-cyber insurance is vast — for example, it can be offered to millions of bank account holders, mobile phone customers, or consumers buying laptops or online games to name a few.

Benefits of offering micro-cyber cover

With cybercrime rising and becoming increasingly sophisticated, cyber protection undoubtedly leads to customer reassurance and trust when they use online products.

The programme offers significant benefits to the organisation including:

Differentiates the product and increases sales: In a crowded marketplace, where consumers are price sensitive, the giveaway is a unique selling point.
Creates opportunities to sell other products: The personal cyber programme can help promote and sell other relevant coverages — such as accidental damage cover and extended warranty.
Strengthens brand loyalty: Longer and broader cyber protection can form part of the after-purchase service, encouraging consumers to remain in the organisation's customer life cycle, and therefore promoting brand loyalty.
Provides visibility on cyber claims data: Enables the organisation to assess cyber risk exposures on covered products.
Online cyber awareness training: Micro learning courses to educate customers on cyber risk, which can help reduce the incidents of cyberattacks. These courses can be bundled into the promotional offer or embedded in the programme. They are highly relevant for student or other at-risk customer segments.
Data insights: Over time, a data strategy built around the programme can also help the organisation manage its own risks, as that data will provide improved visibility of the overall customer journey, including information on severity and frequency of loss for parts and device models, claims, and consumer buying habits.

The embedded micro-cyber insurance programmes address the needs of organisations with the following attributes:

In general, the provision of cyber protection adds integrity and value to any digital banking process, attracting customers to a bank.
Sports bodies, as part of a membership to protect children from cyber risk, including cyber bullying.
Professional organisations offering qualification services — cyber insurance can enhance a subscription.
Doctors’ associations — clinics can be protected against cyberattacks.
Employers, as part of an employee benefit package.
Package or warranty offering upgrades — cyber protection can be offered as part of the upgrade.
Many kinds of memberships and VIP programmes can be enhanced by a personal cyber insurance plan.

The price of programme is low — currently less than $1 a month per consumer.

Please consult your local Marsh office on availability in your region.