Coalition’s new partnership with commercial insurer
MSIG puts a spotlight on the growing demand for cyber insurance.
The two companies announced their collaboration earlier this month. MSIG will leverage
Coalition's capabilities like real-time risk monitoring, incident response tools, and AI-powered threat detection, for a new cyber insurance offering for global businesses operating in the United States, distributed via MSIG USA’s brokerage partners.
Coalition's latest partnership adds to its list of insurance brokers like
Allianz and
Lloyd’s, which already have access to the San Francisco-based company’s cybersecurity capabilities. For
Coalition, such collaborations expand its reach, according to
Kevin Schmidt, principal for its channel and security partnerships.“We work with these large commercial insurers to gain additional capacity – capital and resources – which enables us to underwrite more organizations,” Schmidt told MSSP Alert. “As we continue to expand internationally, most recently in Denmark, Sweden, and Germany, our relationships with these organizations demonstrate that Coalition is a trusted global brand.”
The partnership with New York City-based MSIG comes as the overall cyber insurance market continues to mature, with insurance brokers continuing to add cyber insurance coverage. According to Arctic Wolf's report, about 49% of insurance brokers in North America have a designated cyber practice while the number is 43% globally.
Long Runway for Cyber Insurance
There is also room for growth, according to
Arctic Wolf. Only about 47% of eligible organizations have cyber insurance policies. The global insurance market is expected to expand from $20.88 billion in 2024 to
$120.47 billion by 2032. Still, cyber insurance is relatively new, according to Schmidt.
“Cyber risk is unlike any other risk,” he said. “It’s incredibly hard to predict because the threats are dynamic, digital, and far more complex. That’s why traditional insurance is inherently limited: the legacy approach was to use historical data to predict future outcomes. Traditional insurers – and many other ‘insurtechs’ – rely on generic models and snapshot scanning from third-party vendors, making it nearly impossible to underwrite cyber risk and, ultimately, protect insureds appropriately.”
Addressing the Threat Lifecycle
With its active insurance operations, Coalition
works with organizations in all parts of cybersecurity, from helping them secure their systems before an incident occurs, detecting and blocking them when they happen, and restoring their technology and finances after, he said.
“Our approach combines risk assessment, protection, response to cyberthreats, and comprehensive insurance coverage in a single solution,” Schmidt said.
“It's pretty apparent these days that insurance must include some form of cyber insurance beyond the traditional things covered in the past,” Jack Gold, principal analyst with
J. Gold Associates, told MSSP Alert. “With a risk of data breaches being so prevalent, most organizations are in need of such protection.”
A Complementary Relationship with MSSPs
MSSPs and MSPs play a significant role in the evolving cyber insurance space, he said. Schmidt also added that they drive risk reduction and insurability at scale, and that the relationship between them and Coalition is complementary.
“Cyber risk management requires deep alignment across all stakeholders of an organization, as well as active participation and collaboration,” Schmidt said. “Without managed security controls, many businesses wouldn’t qualify for cyber insurance coverage. MSSP involvement and expertise are critical to a cyber insurance provider's ability to limit losses and payouts.”
He highlighted a report from the Institute for Security and Technology (IST) which found that co-marketing partnerships can ease the process of underwriting by making it simpler for businesses to show its security posture and qualify for coverage.
Coalition’s Cyber Insurance Readiness and Compliance (CIRC) program lets MSSPs use cyber insurance to drive deeper conversations with customers about cybersecurity and cyber risk in terms of financial loss, existing threats, balance sheet impacts, and how security investments can reduce exposure.
“Managed service providers (MSPs) know, as well as anyone, that businesses need help when it comes to making risk-reducing decisions,” Schmidt wrote in a blog post in July. “At Coalition, we recognize the important role that MSPs play within our day-to-day operations, especially given the nature of technology and cybersecurity challenges among small businesses.”
