Authored by Doug Kreitzberg, tCEO of SeedPod Cyber
Introduction
The cyber insurance landscape is undeniably in a state of flux. With cyber threats on the rise and businesses increasingly recognizing the importance of robust security measures, the industry has significantly transformed. The once straightforward process marked by simple application forms and affordable premiums has evolved into a complex labyrinth filled with intricate inquiries and escalating costs.
Notably, amidst these changes, insurance requirements have emerged as an imperative driver that propels businesses to fortify their cybersecurity strategies. This shift presents both opportunities and challenges for Managed Service Providers (MSPs). However, MSPs that can effectively integrate embedded cyber insurance into their service offerings stand to reap numerous benefits. These benefits range from inflated Monthly Recurring Revenue (MRR), improved client retention, to increased client acquisition potential – all of which are crucial for an MSP’s growth and success.
1. The Indispensable Role of MSPs in Bolstering Cybersecurity
In today’s digital age, no other partner in a small business’s digital supply chain carries as much weight or importance as the MSP. Indeed, MSPs are the lifeline connecting businesses worldwide to the digital infrastructure. Given this critical role, managing cyber risk for their clients becomes an essential part of an MSP’s function which entails fulfilling four primary roles in the cyber risk management process:
1.1 Evaluating, Quantifying and Communicating Risk
MSPs play a significant role in the risk management process by conducting thorough security assessments and assisting clients in understanding the risks they face before implementing necessary risk mitigation strategies. Leveraging their cybersecurity expertise and knowledge of their client’s business, MSPs can help clients proactively address vulnerabilities while demonstrating a strong commitment to rigorous risk management practices.
1.2 Implementing and Managing Cybersecurity Solutions
Once risks have been duly assessed and essential vulnerabilities identified, the MSP steps in to assist clients in executing solutions that enhance their cybersecurity stance. These solutions span from patching, enforcing Multi-Factor Authentication (MFA), applying best practice backup solutions, NextGen AV/EDR, email filtering, firewalls, encryption, decommissioning EOL software, securing RDP ports to ensuring security awareness training is in place. For some organizations, the risks might necessitate more advanced cybersecurity measures such as vulnerability management and implementing a Security Operations Center (SOC) or Managed Detection and Response (MDR).
1.3 Advancing Towards Resilience
A business’s system-related objectives are numerous and varied, but maintaining operations (resilience) certainly tops the list of their expectations.
Resilience forms a crucial part of an MSP’s risk management strategy for its clients. This involves traditional MSP service offerings like network management, maintenance, and ticketing as well as Business Continuity / Disaster Recovery activities like data recovery testing, incident response planning and tabletop simulations.
Another key to resilience is ensuring a healthy balance sheet post-incident. This is where cyber insurance becomes instrumental.
1.4 Collaborating with Cyber Specialists for Comprehensive Protection
It’s becoming increasingly common for cyber insurance specialists to partner with MSPs for mutual benefits. At SeedPod Cyber, we’ve formed strategic alliances with numerous MSPs to bolster their clients’ cybersecurity posture, streamline our underwriting processes and offer more competitive premiums. This collaboration allows us to gain a comprehensive understanding of clients’ security measures for underwriting purposes while providing MSPs with the opportunity to offer holistic solutions and giving clients access to affordable embedded cyber insurance.
2. Guiding Through Cyber Insurance Requirements: A Detailed Guide for MSPs
Cyber insurance has emerged as an inseparable part of a comprehensive cybersecurity strategy with MSPs playing a pivotal role in helping clients understand and meet the specific requirements of cyber insurance policies. Here are some practical insights on how MSPs can effectively fulfill these requirements:
2.1 Showcasing and Maintaining Robust Cybersecurity Measures
To reassure clients and their own Tech E&O / Cyber Insurance underwriter that they are well-equipped to handle cyber risks, MSPs must showcase their robust cybersecurity measures. Here are some best practices for doing so:
- Conduct regular security assessments to identify and address any vulnerabilities before they can be exploited.
- Employ multiple layers of security defenses, such as firewalls, intrusion detection systems, and endpoint protection.
- Stay ahead of all patching needs, especially critical security patches.
- Control access to sensitive data and enforce stringent password policies.
- Maintain role-based access, logging and alerting on the Remote Monitoring and Management (RMM) and the document management system used to store client credentials.
- Implement script management procedures to ensure only authorized scripts can be used or deployed through the RMM.
- Have effective backup and BC/DR procedures in place, including an incident response plan. Also, ensure that both your backups and your IR plan are tested frequently.
- Implement a Security Information and Event Management (SIEM), SOC or MDR to ensure all logs are collected and maintained, and that alerts are reviewed promptly.
2.2 Nurturing Relationships with Cyber Insurance Specialists
In order to fully cater to clients’ needs for cyber insurance, MSPs should foster relationships with cyber insurance specialists. Some best practices comprise:
- Understanding the Underwriting Process: Collaborate with your insurance partner to understand their underwriting process thoroughly. This will help you stay informed about changes in coverage offerings or policy requirements.
- Staying Informed about Emerging Trends: Regular communication with your insurance partner is essential to stay updated on trends in the cyber insurance industry. This knowledge will empower you to adapt your services to meet evolving client needs.
2.3 Integrating Cyber Insurance into Risk Management Strategies
MSPs should weave cyber insurance into their risk management strategies by considering:
- Incorporating Underwriting Requirements into Tech Stack: Work closely with your partner to understand technical underwriting requirements and incorporate them into your Standard Operating Procedures (SOPs). This can minimize friction and identify clients that already meet the carrier’s needs.
- Introducing Clients to Your Cyber Insurance Partner: Unlike other products and services you sell as an MSP, you cannot sell cyber insurance. However, you can refer parties to your cyber insurance specialist who, as a licensed agent, is authorized to communicate terms, pricing and coverage to your clients.
3. Leveraging Cyber Insurance for Business Opportunities: An In-depth Guide for MSPs
Cyber insurance offers MSPs the unique opportunity to differentiate their service offerings in a fiercely competitive market. Here are some strategies MSPs can adopt:
3.1 Building Strategic Alliances with Insurance Partners
By forming alliances with cyber insurance specialists, MSPs can leverage their cybersecurity expertise to deliver comprehensive solutions tailored to insured clients’ specific needs. These alliances not only enhance service offerings but also provide MSPs with a competitive edge in the market.
3.2 Offering Comprehensive Cybersecurity Packages for Insured Clients
To offer holistic solutions for insured clients, MSPs should bundle their managed security services with cyber insurance policies. This integrated approach enhances the value proposition for clients and simplifies the procurement process by offering a one-stop solution.
4. The Future of Embedded Insurance in Cybersecurity
Traditionally, the underwriting of cyber insurance has predominantly been based on the attestation of applications and external scanning. These measures are used to assess the integrity of an insured’s control environment, ultimately calculating the risks and determining the terms and pricing of the insurance policy.
4.1 How Embedded Insurance is Changing the Game
However, the advent of embedded insurance is disrupting this traditional approach to underwriting cyber insurance. In this model, underwriters utilize data obtained from behind the firewall – a more reliable source that reduces the uncertainty around the overall environment. This clearer picture of risk often results in improved terms and pricing for clients as it presents a more accurate reflection of their security posture.
As an example, SeedPod Cyber’s embedded cyber insurance program for MSP clients has helped save insureds on average 30% on their cyber insurance premiums and has identified gaps in their security posture that provide the MSP additional revenue opportunities to address.
4.1 The Future: Continuous Monitoring and Embedded Insurance
Looking ahead, continuous monitoring promises to further revolutionize the cyber insurance industry. By providing real-time data, continuous monitoring will enhance underwriting performance, pricing, and even streamline the application process itself. This advancement not only benefits underwriters but also serves as a boon for policyholders who can be rewarded with better terms for maintaining strong cybersecurity controls.
Conclusion
To conclude, it’s evident that cyber insurance has become an essential component of a comprehensive cybersecurity strategy. Armed with the knowledge from this guide, you can make informed decisions that will enhance your cybersecurity offerings.
Consider partnering with a cyber insurance program that integrates underwriting criteria into your existing tech stack. This will streamline the process and provide seamless coverage for your clients.
Remember that as an MSP, your role extends beyond just selling technology services. You are a trusted advisor in cybersecurity and it’s crucial to maintain that position by staying updated about evolving cyber threats and insurance trends.
Embrace cyber insurance as a strategic tool, leverage insights from this guide, and navigate the world of cyber insurance with confidence!
FAQs
What is the crucial role of MSPs in strengthening cybersecurity?
MSPs play an integral role in strengthening cybersecurity for small businesses by offering expertise, resources, and support to help prevent and respond to cyberattacks.
Why is cyber insurance becoming an essential part of a comprehensive cybersecurity strategy?
Cyber insurance is increasingly viewed as essential because it provides financial protection and support in the event of a cyber incident, helping businesses recover and minimize the impact of an attack.
How can MSPs leverage cyber insurance as a differentiator for business opportunities?
MSPs can use cyber insurance as a lever to both upsell cybersecurity solutions and to differentiate them as a cyber risk manager for their clients.
