Where To Go For Small Business Cybersecurity Advice

Small businesses are increasingly vulnerable to cyberattacks. A new website launched by the Federal Trade Commission (FTC) is aimed at helping small business owners be better prepared.

The site – ftc.gov/SmallBusiness – is a one-stop shop where small business owners can find information to protect themselves from scammers and hackers, as well as resources they can use if they are hit with a cyberattack.

Online FTC resources include a new Small Business Computer Security Basics guide with information to help companies protect their files and devices, train employees to think twice before sharing the business’s account information, and keep their wireless network protected, as well as how to respond to a data breach.

Specific information on ransomware and phishing schemes targeting small businesses is also provided.

According to the U.S. Small Business Administration, there are more than 28 million small businesses nationwide, employing nearly 57 million people.

Cyberattacks can be particularly damaging to small businesses, and many lack the resources that larger companies have to devote to cybersecurity.

For example, the percentage of spear-phishing attacks targeting small business rose from 18 percent to 43 percent between 2011 and 2015.

Insurance is one of the ways in which small businesses can protect themselves. See I.I.I. resources on cyber liability risks.

Industry Full Year Results In Context

By now you’ll have read the headlines that the U.S. property/casualty (P/C) insurance industry’s $42.6 billion profit for the full year 2016 was 25 percent lower than its $56.8 billion profit for 2015.

Putting some context around the numbers is important.

I.I.I. commentary: “U.S. economic activity slowed somewhat in 2016 compared to 2015 — real GDP rose by 1.6 percent in 2016 vs. 2.6 percent in 2015—and the P/C insurance industry’s results followed suit.”

And: “this result should be viewed in the context of the last 20 years (adjusted for inflation), in which case the 2016 profit is the median result.”

Two other key takeaways:

—Despite the challenge of ongoing low interest rates, weak domestic and global economic growth and rising claims, the industry nevertheless posted a modest 2.7 percent net written premium growth (compared to 3.5 percent in 2015).

—Overall industry capacity (policyholder surplus) rose to $700.9 billion (up 4.0 percent) as of December 31, 2016. This is a new peak for industry surplus.

As I.I.I. chief economist Dr. Steven Weisbart notes:

“The industry’s performance in 2016 could be characterized as its “new normal,” neither as profitable as in 2013-15 nor as affected by catastrophes as in 2011-12.”

The industry results were released by ISO, a Verisk Analytics company, and the Property Casualty Insurers Association of America (PCI).

Flooding Events May Shift Prevention Strategies

Hurricane season has yet to begin and already record-setting flooding in parts of the central United States will likely become the country’s sixth billion-dollar disaster event of 2017.

While Missouri and Arkansas have been hit the hardest, recent flooding in the central U.S. has been widespread and it will likely take weeks before the full extent of flood damages is known.

So far, 2017 has seen five billion-dollar disaster events, including one flooding event, one freeze event, and 3 severe storm events, according to NOAA.

KSGF.com: “This year is off to a quick start for the number of billion-dollar weather disasters, similar to 2016 and 2011, which each had 15 and 16 disasters, respectively.”

Climate Central reports that many communities across the U.S. are not prepared for massive rain events and living behind a levee is not an absolute guarantee of protection.

“The growing realization of the lingering risk from levees is causing some rethinking of flood protection strategies in riverfront communities. This can include simply setting levees back from the risk and installing parkland that is intended to flood and provide rain-swollen rivers some breathing space, as well as preventing development in flood-prone areas.”

Last week’s breach of the local levee system in Pocahontas, Arkansas is a good example. Check out these aerial pics via the Capital Weather Gang.

Flood damage is excluded under standard homeowners and renters insurance policies. However, flood coverage is available in the form of a separate policy both from the National Flood Insurance Program (NFIP) and from a few private insurers.

I.I.I. facts and statistics on flood insurance has additional information.

Butler University Inspires With Student-Run Captive Insurer

If you’re looking for inspiration to join the insurance sector, look no further than this story of student innovation and enterprise out of Indiana’s Butler University.

The University’s live mascot bulldog Trip, rare books, fine art, and observatory telescope are just some of the items that will be insured by MJ Student-Run Insurance Company, the brainchild of risk management and insurance majors at Butler’s Davey Risk Management and Insurance Program.

MJ Student-Run Insurance Company, a captive insurer, just received licensing approval from the Bermuda Monetary Authority and will officially open for business August 1.

Note: A captive a special type of insurance company set up by a parent company, trade association or group of companies to insure the risks of its owner or owners.

Butler newsroom blog reports that the insurance company was created as a way to give students hands-on experience to prepare them for an industry that anticipates needing 400,000 new employees by 2020.

While 1,900 American universities have accounting programs, and 900 have finance programs, only 82 offer insurance and risk programs, noted Zach Finn, clinical professor & director of Butler’s Davey Risk Management and Insurance Program.

Finn drove the creation of the Butler program back in 2012 to promote his search for a mix of textbook and experiential learning.’

Bernews.com reports:

“This is entrepreneurship at its best. MJ Student-Run Insurance Company Ltd is believed to be the first such captive created, paving the way for future innovation.”

Butler’s captive insurance company was funded by a gift from MJ Insurance and Michael M. Bill.

Check out I.I.I. information on captive insurers and other risk-financing options here.

Small Business Insurance Is Going Digital

The way in which small business owners buy insurance is changing, as the number of ventures owned by Millennials/GenXers increases.

Up to 25 percent of total small business insurance premium could be digitally underwritten by 2020, Willis Towers Watson Securities reports.

“Small businesses are expected to grow an average of 6 percent annually through 2020, at which point over 60 percent of businesses are expected to be owned by Millennials/ GenXers who are much more likely to favor digital management of insurance coverages.”

Traditional insurers are embracing new technologies, both by creating proprietary platforms and partnering with small business insurance distribution focused start-ups.

Here are some recent examples of digital innovation in the $100 billion small business insurance market, via Willis Towers Watson Securities inaugural Quarterly InsurTech Briefing:

Whether a start-up or an established company, disruptions can devastate a business. Small business week is the perfect time to tune up your insurance coverage, the I.I.I. says.