For both cybersecurity service providers and insurtechs that focus on commercial clients, adding a cyber insurance product can build significant recurring revenue for your business, and deepen your relationships with your current customers.
Creating a new insurance product, however, is much more complex than a new piece of software or a physical gadget. Building an insurance program from scratch is a yearslong endeavor that requires a significant amount of capital and specialized expertise. A much faster path to market is to white-label an existing cyber insurance product, and offer it to your customers.
In this article we’ll go over the process of getting to market with a white-label cyber insurance product, and the advantages of this route vs. building a new product yourself.
What is White-Labeling for Cyber Insurance?
A white-labeled product is produced by a particular company, then sold by other companies under their own brand. This is common with physical goods, particularly products sold as part of a certain store’s brand.
For example, Costco offers a broad variety of goods under their Kirkland Signature label, ranging from jeans to potato chips. However, Costco doesn’t own and operate the factories and logistics chains necessary for producing hundreds of diverse items. Instead, they source products from other businesses that do manufacture those goods, and then sell them in-store under the Kirkland Signature branding.
The same principle applies to white-label insurance. Insurance-as-a-service providers such as Boost have already invested the time and resources to build new insurance products, which other businesses can then offer under their own branding. This allows businesses to get to market with a new insurance offering at a much lower time and cost requirement than would be required to build a new product themselves.
Getting to Market with White-Label Cyber Insurance
Once your company decides to offer white-labeled cyber insurance, there are a few steps to go through in order to get to market.
1) Select a partner
The first step is choosing the insurance provider whose products you want to white-label. This could be an insurance-as-a-service provider like Boost, or possibly a traditional insurer.
When selecting a partner, make sure to ask about two things: what they allow for white-labeling, and whether the product can be customized. Some insurers allow for their products to be resold, but not re-branded; others offer products as-is and don’t allow changing things like the coverage configurations. Be sure that your partner can deliver on what your business needs (and expects).
2) Choose the coverages to offer your customers
You know your customers best - what they need, and what they don’t. Assuming your partner allows customization, the second step is to configure your cyber insurance product so that it’s right for your audience.
There may be some coverages that are particularly important to your customers, and others that aren’t relevant to their particular business needs. In general, the more an insurance product covers, the more expensive it is. You can ensure the best value for your customers by building an insurance package that includes all the protections that they need from cyber insurance, with nothing that they don’t.
3) Get licensed to sell insurance (if you aren’t already)
If your business is an insurtech, you’ve already got this covered. If your company is new to insurance, however, you’ll need to get an insurance license to gain the full benefits of offering cyber insurance.
There are multiple types of insurance licenses, and the exact requirements vary from state to state. Since insurance in the U.S. is regulated at the state level, you’ll also need a license from each state you intend to sell insurance in. However, this is less difficult than it sounds. With support from a good partner, the process can be very straightforward and relatively painless.
4) Connect to your partner’s system
After you’ve settled on a partner and product, you’ll need to connect your partner’s system to your digital experience to offer the product to your customer. When you work with Boost, this means leveraging our API to build an integration between your website or app and Boost’s policy administration system.
If you’re not familiar, a policy administration system (PAS) is the system of record for every transaction related to an insurance policy. For digital insurance, the PAS is the technological underpinning that allows customers to buy and manage their policies online. Different PAS have different capabilities, and some are better able to support digital insurance workflows than others. This is another area where it pays to get detailed with your partner, so there are no surprises when it comes time to deploy.
5) Start offering insurance to your customers
Once the integration is complete, you’re ready to start connecting your customers with cyber insurance. Your customers’ purchase experience can vary depending on your partner’s capabilities and business policies.
Here’s how it works with Boost: your customers will be able to buy your white-labeled cyber insurance directly from your existing website or app, under your own brand. The customer can manage every part of their policy lifecycle digitally, from quote to purchase to modifications, with no offline manual processes. The cyber insurance product will be branded as your company’s product, all the way down to the logo on the policy documents.
Advantages of Offering White-Label Cyber Insurance
There are several upsides to offering a white-labeled cyber insurance product instead of building an entirely new cyber product just for your business to sell. The benefits include lower costs, faster time to market, and easier, more scalable operations.
Lower Cost
Building a new insurance program requires significant financial investment, particularly when it comes to expertise. Insurance is complex, and successfully creating a new product requires actuaries, underwriters, insurance regulatory attorneys, and more. Then there’s the tech side - if you want to offer your product digitally, you’ll need a PAS capable of supporting all of the necessary insurance operations. This means considerable development work, even starting with an “off the shelf” PAS.
All in all, the costs of building a new insurance program from scratch typically run into the millions of dollars. White-label products have already gone through the development process, and are ready to sell digitally. While there are still development costs required to connect your partner’s PAS to your digital experience, those expenses are usually a fraction of what it would cost to create an entirely new cyber product and the digital infrastructure to sell it.
Faster Time to Market
While exact timing can vary, it’s safe to expect a timeline of at least three years between starting the process of creating a new insurance product, and being able to sell your first policy. There are many steps involved in building an insurance program from scratch, and some of them - like convincing a carrier to back your product - can be very difficult to accomplish for new entrants to the insurance market.
Since white-label cyber insurance products are already built and ready to sell, the go-to-market timeline for offering these products is dramatically shorter. You’ll just need to sign with your partner and then build the necessary integrations, a timeline of weeks or months instead of years.
Built-in Scalability
Insurance programs are constrained by their capacity - the maximum amount of value a program can insure, as determined by the total amount of capital available to cover its losses. Once a program has sold as many policies as its capacity can support, it can’t sell any more until more capacity becomes available.
Acquiring more capacity for an insurance program requires complex negotiations with licensed insurance or reinsurance carriers, which can take a long time. With white-label cyber insurance products, your partner will have already secured the capacity needed to sell your product, and built a network of relationships with capacity providers to ensure their programs can continue to scale.
Streamlined Operations
Launching your insurance offering is only the beginning. The program will need to be managed on an ongoing basis. This includes responsibilities like ensuring that it remains compliant with all relevant state regulations, maintaining and continuing development of the technology required to sell digital insurance, and managing claims from your customers (which are legally required to be handled by licensed professionals).
Building your own cyber insurance product means that you’re responsible for these ongoing operational needs, and you’ll need to hire in-house resources to manage these them. If you choose to white-label, however, then your partner will be the one to manage these ongoing program requirements. This represents significant opex savings, and allows non-insurance companies to avoid a costly distraction from their core value and offerings.
Cyber insurance is a big revenue opportunity for insurtechs and cybersecurity companies alike. White-label cyber insurance allows businesses to tap into that opportunity, with significantly lower barriers-to-entry than building a whole new cyber insurance product themselves.
Thinking about adding cyber insurance to your offerings? Our free ebook has everything you need to know. Download The Comprehensive Guide to Offering SMB Cyber Insurance today, or get in touch with our experts to learn more.
