In April this year, San Francisco-based cyber insurer Cowbell announced its expansion into the UK market, led by the appointment of Simon Hughes as VP and general manager. A familiar face in the UK cyber insurance market, the move was a natural progression for Hughes, representing a best-of-both-worlds opportunity – a blank sheet of paper backed by a well-established book.
The opportunity to build Cowbell’s presence in the UK and roll out its adaptive cyber insurance products to UK brokers was too good to pass up, he said. After seven “fantastic” years at CFC, he stepped into his new role. In the last six months, the firm has gone from strength to strength, bolstering its team with several key hires, including Catherine Aleppo and Claud Bilbao, and launching its first UK specialty product, Cowbell Prime One.
“Between us, we’ve got over four decades of experience, and we’re in a very fortunate position in that we’re not knocking on doors, having to introduce ourselves to the market,” he said. “So far, the launch has been very successful. We’ve had a great reception from our brokers, written a lot of target business, and have the support of great capacity providers.”
Is there an appetite for cyber insurance innovation?
From his conversations across the market, Hughes pinpointed a clear appetite for a new cyber insurance player that does things a little differently. For Cowbell, that point of differentiation is the emphasis it places on educating the market about cyber risk and its ambition to close the cyber insurability gap for UK small and medium-sized enterprises (SMEs) by making cyber insurance protection accessible and affordable.
“We’re not a ‘computer says no’ kind of organization,” he said. “We want to talk to brokers, we want to support them in having these conversations. Because your average general insurance broker is understandably not always comfortable having conversations about cyber because it is such a complex topic. But the thing with cyber is, once you get it, you’ve got it. And what we want to focus on at Cowbell is helping them to ‘get it’. We want to get the market comfortable and confident talking about cyber.”
Bringing brokers along the cyber insurance journey
An essential metric of how successful Cowbell is in achieving this ambition is how many regional brokers it can bring along on that journey, he said. All too often, cyber education initiatives have focused on brokers based in London, but a key area of focus for him is getting the message out there to general insurance brokers based throughout the UK and giving them the confidence to talk about cyber fluently.
“The reception we’ve had to that ambition so far has been really good,” he said. “But we don’t want to have a once-and-done conversation with our broker partners. We want this to be an ongoing dialogue and to do that we need to be continually engaging with brokers. We want to help them grow their book of business, to help them turn that 5% cyber penetration rate into 50% and beyond.”
Changing the narrative on cyber insurance
Hughes highlighted that alongside the emphasis on educating the market, Cowbell is committed to expanding the idea of what cyber insurance looks like and how it protects businesses. Cowbell is committed to changing the narrative on cyber, he said, and moving from a ‘stick’ to a ‘carrot’ approach by incentivizing good risk behaviors and providing bespoke insights into how customers can boost their cybersecurity.
“That was a real draw to Cowbell for me because I don’t feel the cyber insurance market in the UK is doing enough to incentivize cyber policyholders,” he said. “We’ve got a number of great partnerships that we’ve developed with our partners at Amazon Web Services, Microsoft, Sophos, to name but a few, that allow us to utilize our connectors – which allows us to extend our scanning capability beyond just the perimeter of an organization.
“Having our policyholders engage with our connectors not only offers an enhanced level of protection, but it means premium discounts at renewal, which are important, as you rarely see appropriate incentives being offered by cyber insurance providers for their policyholders to become better risks.
“We have the capability to adapt our policies to make sure they fit our clients’ requirements throughout the whole lifecycle of the policy – to make sure they’re taking the right preventive measures to protect themselves and their businesses.”
Technology – the problem and the solution
Successfully creating a unique proposition is made possible by having the right technology and data platforms, Hughes said, and it’s interesting to see how technology is so often the solution to offsetting the new cyber exposures being created by advances in technology – and particularly in AI.
“Nobody else in the market is using data to inform their underwriting in the same way we are, either in the US or the UK,” he said. “We’re transparent with our data, we give it all back to our brokers so they can use it as they see fit. We’ve already pre-underwritten five and a half million SMEs in the UK in our risk pool, so we know with a good degree of certainty what their risk profile looks like and what they will need from us if they become policyholders.
“All of that data is fed into our AI-driven underwriting platform, which enables us to make better underwriting decisions, with demonstrably improved loss ratios. That’s what really sets us apart in the UK – we’re committed to using our technology and data to find a way to offer cyber insurance to all our clients.”