Tag: business insurance

22Aug

Why Traditional Businesses Need Cybersecurity Insurance

Traditional businesses are vulnerable to cyber threats such as data breaches, hacking, and phishing scams. As technology evolves, so do the risks of cyber attacks. Cybersecurity insurance can help mitigate these risks and protect your business from financial losses. In this blog post, we’ll discuss why traditional businesses need cybersecurity insurance, the different coverage options, and best practices for network security.

Understanding Cybersecurity Insurance for Traditional Businesses

Cyber threats can take many forms, including malware, ransomware, social engineering attacks, and insider threats. Traditional businesses must be aware of these risks and take proactive measures to prevent them.

Here are some ways in which cyber attacks can pose a threat to such a business:

– Operational Disruption: Cyber attacks like Distributed Denial of Service (DDoS) attacks can overwhelm a business’s digital infrastructure, causing websites to go offline or systems to become inaccessible. This disrupts normal operations and can lead to loss of revenue.

– Intellectual Property Theft: Businesses often hold valuable intellectual property, such as trade secrets, proprietary algorithms, and product designs.

– Reputation Damage: A cyber attack can lead to negative publicity and harm the business’s reputation. Customers may lose trust in the company’s ability to protect their data and privacy.

– Supply Chain Attacks: If the business relies on third-party vendors or suppliers, cyber attacks targeting these partners can indirectly affect the business. Compromised suppliers might lead to the distribution of malicious software or insecure products.

Coverage Options for Cybersecurity Insurance Policies

Cybersecurity insurance policies can cover a range of losses, including data breaches, business interruption, and cyber extortion. It’s important to understand the coverage options available and choose the right policy for your business needs.

Factors that Affect Insurance Premiums

The cost of cybersecurity insurance premiums can vary depending on factors such as the size of your business, the type of industry you’re in, and the level of risk you face. It’s important to assess your cybersecurity risks and choose a policy that provides adequate coverage at an affordable price.

Choosing the Right Cybersecurity Insurance Policy

Before you can choose the right cybersecurity insurance policy, you need to assess your business’s cybersecurity risks. This involves identifying potential vulnerabilities and determining the likelihood and impact of a cyber-attack.

Identifying the Right Coverage Options

Once you have considered your cybersecurity risks, you can identify the coverage options that are most relevant to your business. This might include coverage for data breaches, business interruption, and cyber extortion.

When choosing a cybersecurity insurance policy, comparing policies and insurance providers is important to find the best fit for your business. Look for a provider with a good reputation, clear terms and conditions, and competitive pricing.

Mitigating the Risks of Cyber Threats with Cybersecurity Insurance

Traditional businesses should develop a cybersecurity policy to mitigate the risks of cyber threats. This policy should outline best practices for network security, such as employee training, software updates, and access controls.

In addition to developing a cybersecurity policy, traditional businesses should implement best practices for network security. This might include using firewalls, antivirus software, and encryption technologies and regularly backing up data and monitoring network activity.

Finally, it’s important to regularly review and update your cybersecurity insurance policy to ensure that it continues to meet your business’s needs. This might involve reassessing your cybersecurity risks, adjusting coverage options, or switching to a different insurance provider.

Traditional businesses are increasingly vulnerable to cyber threats, and cybersecurity insurance can provide important protection against financial losses. By assessing your cybersecurity risks, choosing the right policy, and implementing best practices for network security, you can mitigate cyber-attack risks and protect your business from harm.

30Jul

Hong Kong Small Business Insurance 101: Your Go-To Guide

If you’re a small business owner in Hong Kong, you understand the dedication and hard work it takes to build and sustain your enterprise. Protecting your business against unforeseen risks is just as important as nurturing its growth. This article serves as your comprehensive guide to small business insurance, offering insights tailored to the Hong Kong market.

Understanding Small Business Insurance

Small business insurance is a safeguard that helps protect your company from various risks and liabilities. It provides financial assistance in case of unexpected events that could otherwise lead to substantial losses. In Hong Kong’s dynamic business environment, having the right insurance coverage is crucial for your peace of mind and business sustainability.

Common Types of Small Business Insurance in Hong Kong

  1. Property Insurance: This coverage safeguards your physical assets, such as your business premises, inventory, equipment, and furnishings. In case of events like fire, natural disasters, or theft, property insurance helps you recover financially.
  2. Liability Insurance: Liability coverage shields your business from legal claims arising from injuries, property damage, or accidents that occur on your premises. It also extends to product liability, protecting you if a product you sell causes harm to customers.
  3. Cyber Insurance: Also known as cyber insurance, is a type of insurance coverage designed to protect businesses from the financial losses and liabilities associated with cyber-related incidents. These incidents can include data breaches, hacking attacks, ransomware, malware infections, and other forms of cybercrime.
  4. Business Interruption Insurance: If your business operations are disrupted due to unforeseen events, such as a fire or natural disaster, business interruption insurance covers the loss of income and ongoing expenses during the downtime.
  5. Workers’ Compensation Insurance: If you have employees, workers’ compensation insurance is mandatory in Hong Kong. It covers medical expenses and lost wages if an employee gets injured or becomes ill due to work-related activities.
  6. Professional Indemnity Insurance: Especially relevant for service-based businesses, this insurance protects against claims of professional negligence or errors that lead to financial losses for clients.

Customizing Coverage for Your Business

Every business is unique, so your insurance needs may vary. When choosing coverage, consider factors like your industry, size, location, and the nature of your operations. Consulting with an insurance professional who understands the Hong Kong market can help you identify the right coverage to protect your specific business risks.

Affordability and Coverage Balancing Act

While securing your business is essential, managing costs is also crucial. Premiums for small business insurance in Hong Kong vary based on factors like coverage limits, deductibles, and the type of business. It’s a balancing act between having adequate coverage and maintaining affordability.

Navigating the Insurance Landscape in Hong Kong

Hong Kong’s insurance industry is well-regulated and offers a variety of insurance providers and brokers. Before purchasing a policy, thoroughly research the reputation and credibility of the insurance company. Check if they have experience serving businesses like yours and evaluate their claim settlement process.

Partnering with an Insurance Professional

Navigating the nuances of small business insurance can be complex, especially in a bustling city like Hong Kong. Engaging with an experienced insurance professional can be immensely helpful. They can assess your business risks, recommend appropriate coverage, and guide you through the policy selection process.

Small business insurance is a strategic investment that protects your hard work and dedication from unforeseen challenges. As a business owner in Hong Kong, it’s your responsibility to understand the insurance options available and choose the coverage that aligns with your business goals and risk tolerance. By securing your business with the right insurance, you’re building a solid foundation for its continued success.

7Mar

How Insurance Companies Can Become Better at Using AI

Insurers Can Use AI to Improve Customer Experience, Develop New Products and Optimize Sales and Marketing Strategies

The insurance industry is ripe for disruption through the use of artificial intelligence (AI). Insurers that are able to integrate AI into every part of their business—from business process optimization to delivering reimagined products, services, and experiences to customers—can move into the achiever category to realize greater value.

Carriers looking to gain momentum with their AI investments can find opportunities in the front office and build out their next phase of growth. Our study explored three key front office use cases that I’ll be diving into in this post: customer experience, product and service development, and sales and marketing.

Customer Experience Intelligence and Journey Automation

When it comes to customer experience optimization, insurers are beginning to make progress compared to other industries—yet they are still in the early stages of AI activation.

Many insurers have invested in developing a single view of the customer and have been able to understand what products customers own, if they have recently made a claim or whether they have received a quote for another product.

While some insurers are starting to gain a better understanding of the interactions they have with a given customer, most insurers struggle to connect the customer journey across multiple channels and touchpoints. Far fewer are able to use those insights to understand the breakpoints in that experience and address them systematically.

Though many insurers have invested in customer relationship management (CRM) platforms to share customer insights across the enterprise, few have layered in AI to use those insights to orchestrate highly personalized customer experiences that span marketing, sales, service, and claims. Leading CRM vendors are integrating AI capabilities into their platforms, making it easier to embed out-of-the-box AI models into any workflow. Choosing such technology is a major opportunity to create omnichannel experiences and build a truly holistic view of each customer.

When it comes to automating parts of the customer journey, conversational AI remains a largely untapped opportunity for the insurance industry as a whole. Those that are creating self-contained conversational experiences that satisfy customers’ needs—rather than simply answering FAQs or pointing customers to where they can get help—are generating higher levels of satisfaction with significant customer service cost savings and reduced reliance on a challenging labor market.

New Product and Service Development

Recently, Accenture found that 88% of executives think their customers’ needs are changing faster than their businesses can keep up with. Factors like climate change and economic uncertainty are forcing customers to adapt to circumstances that are out of their control, moving through territory as they try to make the decisions that are best for them. Our research revealed a need for companies to shift from focusing on customer as consumer to developing a nuanced understanding of the customer as a multifaceted human being with complex and often contradictory desires.

This shift from customer-centricity to an approach we’ve coined “life-centricity” is especially relevant for carriers as they develop products. AI can help carriers widen their understanding of customer behavior and move outside of cookie-cutter customer profiles with data insights. It can help them build offerings that can be tailored to the needs and habits of customers as they move through their life, seamlessly recommending or upgrading individuals’ products to respond to events like the purchase of a new home or providing coverage as climate change reshapes natural disaster risk.

There are plenty of opportunities for insurers to create new products and services that use AI to realize more value and deliver enhanced experiences. We’re already seeing many carriers implementing AI in their auto insurance products to assess driver behavior and offer pay-as-you-drive policies.

As IoT and wearable technology improves, carriers will be able to use AI to gain an even deeper understanding of customer behaviors, meeting their needs and predicting what their needs might be in the future.

Insurers that are looking to gain momentum with their AI investments should focus on the front office, where there are significant opportunities to improve customer experience, develop new products and services, and optimize sales and marketing activities. By leveraging AI to power total enterprise reinvention, carriers can move into the Achiever category and realize greater value.

When it comes to customer experience, insurers should focus on building a single view of the customer, integrating AI capabilities into their CRM platforms, and creating conversational AI experiences that satisfy customers’ needs. For product and service development, insurers should shift from customer-centricity to life-centricity, using AI to widen their understanding of customer behavior and build offerings that can be tailored to customers’ needs and habits. Finally, for sales and marketing optimization, carriers should leverage AI to personalize customer interactions, optimize marketing spend, and identify potential cross-selling and upselling opportunities.

While implementing AI can be a daunting task, carriers that are able to successfully integrate AI into their front office operations will be well-positioned to achieve long-term success in a rapidly evolving industry.

28Dec

Five Tips for Making A Business Preparedness Plan

After a calamity, maintaining your business requires more than good fortune and hope for the best. When the unexpected occurs, a solid business preparedness plan may help you keep your doors open and resume regular operations.

Although nobody can anticipate whether or when a disaster will occur, it is preferable to take preventative measures to safeguard your business. Consider these five stages when building a business preparedness strategy and plan ahead:

1. Establish program management

Everyone on the premises, including people with disabilities, must have their physical safety considered part of your preparedness strategy. You’ll also want to create instructions for continuing business with minimal disruptions.

– Create a department or group that will be responsible for creating and updating your business continuity strategy.
– Set aside money for any backup plans the group comes up with. (This may involve discussing with your agent whether your small business insurance coverage meets your needs.)
– Determine any laws or corporate rules that might impact your plans.

2. Gather information about hazards and assess risks.

This should involve figuring out which events are more likely to happen in your areas, such as whether your company is situated in a flood or typhoon-prone area.

Do a business impact analysis to ascertain the likely effects of a business disruption. Then, examine and take into account strategies for risk reduction and loss mitigation.

3. Determine resources and train staff on how to implement those plans.

Make a plan to help ensure your business has all the resources it needs on hand by evaluating what resources you might need in the event of a disaster, from personnel to communications equipment to other needs.

In the event of an emergency, be prepared to communicate critical information to your staff, clients, and other stakeholders. Make a plan for how you’ll access your electronic data and information technology systems in the event of an emergency.

4. Conduct a test run.

To assess how well-versed and effective your employees are in the plan, conduct a variety of exercises. The evaluation of the established plans and procedures and the personnel training on their responsibilities may benefit from this phase.

5. Update and improve your plan based on the test run.

Review your plan bi-annually or once a year. Then, ensure your employees are reoriented with any changes in your plan. Keep in mind that any significant adjustments to the business or its personnel may necessitate a review of the emergency plan.

If you need additional coverage for disasters, taking note from the COVID years, we recommend getting in touch with us so we can help you find a plan that fits your evolving business needs in Hong Kong.

4Feb

Infographic: Three Examples of D&O Insurance Claims

We recently discussed the increased risks for directors and officers in the time of COVID in our last blog. We also shared questions that both companies and insurers should be asking while in the process of developing new products to answer the emerging needs attributed to the pandemic.

We recommend reading that blog to appreciate the value of purchasing a D&O policy or at least revisiting your current insurance plan to evaluate if it’s enough to protect your company for a possibly huge loss.

Below are examples of claims for D&O from three different types of business:

20Jan

The Increased Risks for Directors & Officers in the Time of Covid

The COVID-19 pandemic has led to significant financial and operational damages in various business sectors around the world.

Many companies have reported drops in revenue at the end of 2020 with foreseen losses continuing this year. Some have need to stop all commercial activities altogether, let go of employees and sell company assets in order to maintain cash flow.

In addition, many businesses have shared that they have received numerous requests for the renegotiation or termination of initial contracts with some requests leading to litigation given the shifts in some employee duties and tasks.

In this context, it is easy to picture conflicts involving directors and officers liability – for instance, with respect to their selection of loss-mitigation actions which may later result in a loss of revenue.

In such situations, it can be difficult to determine which damages were actually because of the company’s decision-makers or which were solely a consequence of the pandemic.

Insurance providers are facing the same challenges as their policyholders. In Asia, insurers have taken the steps to determine the new risks for managers and executives.

There’s increased risk for directors and officers  – thus the need for more comprehensive D&O Insurance policy because of the following:

– Company directors may be held liable for losses when they cannot supply customer demand due to COVID-19. Threats of litigation over a supply chain disruption are quite possible for large losses.

– Lay-offs, non-payment of disability pay, and loss of employee healthcare have been a reality for many companies. This opens directors and officers to lawsuits for wrongful termination or breach of contract on a massive scale.

– In the event of essential businesses that require employees to come to work instead of working from home, decision-makers may also be liable when members of their operations staff get sick with the virus. This is especially a liability risk if the company is found negligent of observing proper health protocols.

Watch this 2-minute video to further understand the value of a D&O insurance policy:

In complicated situations such as the current pandemic, directors and officers are held to higher standards of diligence. Their jobs require careful calculations, planning and strategising. There should be a great consideration for the risks of fraud and other unlawful acts.

Thus, the expectation from managers increases simultaneously with the level of severity of a situation in which their decisions are regarded.

As 2021 progresses, more questions have arisen about the scope of a manger’s or director’s responsibilities. What’s certain is that last year’s events have forced companies to troubleshoot unique situations with plenty of uncertainty on how to do so.

 

5Jan

Insurance Industry Outlook for 2021

What changes will the insurance industry undergo with the lessons learned from 2020? What transformations are to be expected?

Here are some of our insights:

The pandemic and ensuing economic fallout essentially shifted consumer and employee needs, practices, and expectations, while pushing digitization of insurer operations quite quickly. But while most of those in the industry adjusted, insurers are will likely face lingering challenges to growth and profitability this year.

A survey by Deloitte with 200 insurance providers reported that 48% of executives recognised that the pandemic proved how unprepared most providers were to endure this type of economic storm. The same survey also showed that only 25% out of the 200 strongly agreed their providers had “a clear vision and action plan to maintain operational and financial resilience” during the crisis.

The pandemic gravely resulted in a loss for the property-casualty bottom line. This is attributed to massive event cancellations and employee compensation claims.

Given the crisis’ impact on jobs, business transactions, and trade, global non-life premiums were flat for the entirety of 2020, including a 1% decline in advanced markets. [1] However, despite these roadblocks, the industry may yet recover to 3% growth in 2021, led by a possible 7% boost in emerging regions.[2]

Non-Life Insurance Are Forecasted to Recover in 2021

At a regional level, total insurance premium growth in advanced regions and China will be more positive than GDP, mostly driven by non-life insurance. This is mainly due to government support under the rural revitalisation strategy and rising risk awareness. The growth pullback in advanced markets will be less, but we anticipate the largest annual contraction of close to 1% in premium volumes terms throughout this year.

INTERESTING LEARNING: While it was assumed the pandemic might boost consumer awareness about the value of life and health insurance, a J.D. Power study discovered that was not the case. Despite the fatalities in the US with over 300,000 deaths, consumers did not seem any more motivated to get life insurance. This behaviour was due to a combination of scarce client communications and a continuing perception of high-cost and transaction complexity. [3]

Product developments will likely shake-up traditional offers. This is an opportunity for insurers to innovate based on emerging trends and needs.

New types of covers such as the launch of more parametric policies or “index-based insurance” (which pays out on the occurrence of an event rather than having to claim a specific insured property loss). This was observed as the top product development priority among North American and European providers and number three in APAC. The concept, which has already been growing in popularity in property-catastrophe insurance, might have use for future viral outbreaks.

Lloyd’s of London recently introduced a parametric business interruption policy for small- and medium-sized firms suffering IT disruptions.

WHAT CAN BE DONE BEYOND 2021?

Insurance providers must take steps to manage three key phases of the COVID-19 crisis

1. Respond
2. Recover
3. Thrive

When the pandemic hit, insurers reacted by taking critical steps to ensure business continuity and help clients and their communities cope. As we all head into 2021, insurers should consider a mix of offense and defense-based actions to hasten long-term recovery efforts and pivot to the thrive phase when growth is most needed.

References:

[1] Swiss Re Institute, “World insurance: Riding out the 2020 pandemic storm,” Sigma No. 4/2020, July 2020.

[2] https://www.deloitte.com/xe/en/insights/industry/financial-services/financial-services-industry-outlooks/insurance-industry-outlook.html

[3] BusinessWire, “Life insurance customer satisfaction flatlines despite pandemic fears, J.D. Power finds,” accessed November 4, 2020.

7May

Cost of Investing: Tips and Must-Know Info

Investment, in the most basic sense, is all about sacrificing something now for the greater good of the future. The payoff depends on many factors and does not solely rely on how much you invest. However, like all cases, there will always be underlying costs and trades that you should be aware of before jumping right into it.

Vigilance is important. You need to learn to foresee possible changes and learn to handle intangible costs. All of these will have a huge impact on how your seeds will be cultivated, and how your money will grow. Investment is volatile. The more you throw yourself into it and always “touch” it, the more you will be bound to lose it. The last thing you want to do is losing much more than earning. Expenses can be dangerous, even more so when they are misunderstood and aren’t given enough preparation

Here are life-saving tips for everyone who ever braves the waves of investment.

The first blood

They say every move you make these days costs a lot. It gets so severe that spending is forever, and is inevitable as much as breathing. You begin investing with the idea of saving money. A lot of funds can help you out with that. But which is the best? Without any idea, you jump into your favourite bank but suddenly they come clean and tell you that you have an initial fee, which can sometimes be bloated to 5 per cent. It is important to land with the best choice and settle with an adviser who can offer entry funds without costs.

Severing Ties

Basically, any corporation holds policies on exit fees to compensate for the loss of your account being terminated. It’s a little harder to find providers who offer expense-free exit fees, but always be aware of this and ask about the details right away.

The bitter truth

There’s no skirting around the edges on this one. There will always be expenses when it comes to investing. The most positive outcome around it would be to MINIMISE expenses so not a lot would be lost. Investments should be kept simple and transparent. Period.

The magic word

“Reduction in yield” is the key. Never forget. Chances are, if you’re planning to purchase an insurance-linked investment product, there will be a lot of loopholes that they will try to get over your head. Basically, reduction in yield shows the overall effect of changes to a policy. You will be able to predict how the percentages will hit your investment. Some establishments don’t open this freely and will only be revealed if you asked, so it’s equally important as other pointers.

Annual management fees

You have to pay the man. It’s not exactly easy handling other people’s investments. Again, the best choice is to settle with an investment that can have the lowest fees possible. Some cases have fees exceeding two per cent every year, and that isn’t good.

Protect your investment with the right insurance. We help find the best covers for expats and businesses in Hong Kong. Get in touch with us today.