Why Consumers Underestimate Personal Cyber Insurance and How to Bridge the Gap
Insurance agents recognize the pressing threat of cybercrime, but their clients are slow to act. According to the Insurance Information Institute (Triple-I) and HSB’s latest report, Addressing the Personal Cyber Protection Gap, 84% of insurance agents understand the importance of personal cyber insurance. However, only 43% think their clients feel the same urgency. Everyday cyber threats include identity theft, online fraud, malware attacks, extortion, and online harassment. These dangers are rising dramatically, yet 56% of agents report customers remain skeptical about purchasing personal cyber insurance.
Rising Cyber Threats
In 2023, the FBI’s Internet Crime Complaint Center received over 880,000 cybercrime reports. This amounted to losses of $12.5 billion. That is up 10% from 2022. The most common complaint was phishing, which resulted in 300,000 complaints. Financial scams also surged, misleading victims into sharing personal information or financial access. This affected 30% of households.
Despite these alarming numbers, a clear and present danger, customer adoption of personal cyber insurance remains low.

A Clear Knowledge Gap
Although 77% of agents introduced cyber insurance to customers within the last month, adoption rates didn’t result. The top barriers cited are product pricing and uncertainty about coverage breadth. Over half of the agents surveyed believe clients would pay up to $100 for adequate coverage, yet actual purchases remain limited.
Sean Kevelighan, CEO of Triple-I, emphasizes that customers struggle to envision cyber risks until it’s too late, highlighting a crucial need for education, “Agents see the storm, but homeowners can’t envision the damage until it’s too late.”
James Hajjar, chief product and risk officer for HSB, part of Munich Re, put it this way, “The pace of personal cyber threats is increasing at an accelerating rate, and personal cyber insurance is one way to protect against these increasing risks.”
Need for Enhanced Communication
Agents also report difficulty when explaining and selling personal cyber insurance. Only 73% felt confident explaining, and 68% were comfortable pitching and selling the policies. As we noted earlier, and given those findings, it’s worth repeating that at the same time, time 84% believe in the value of personal coverage.
Editorial note: We can’t recall seeing this sort of finding in similar reports, and as the report notes, it suggests a worrying training lapse on the part of insurance providers. Communication is everything, particularly with a new product or concern. Chances at first impression come once. When missed, that first impression needs to be overcome, and that is generally a significant challenge. In our experience, this “language barrier” is a significant barrier to cyber insurance adoption in general.
Not surprisingly, Dale Porfilio, Triple-I’s Chief Insurance Officer, says addressing this personal cyber insurance disconnect is crucial. Educating consumers about cyber risks and clarifying coverage details can improve understanding and adoption. He notes it “is a call to action from insurance professionals to provide greater understanding of the perils to consumers to drive product acceptance.”
Recommendations for Improvement
The report suggests that insurers could enhance sales strategies by providing more targeted training to agents. Workshops, webinars, and online courses could equip agents to address customer concerns proactively, focusing on clearly explaining exclusions, deductibles, and specific coverage details. A simple explanation of personal cyber insurance’s benefits and the protection it can offer against a range of threats, from online harassment to financial scams, is needed.
Relatable Analogy for General Audience
Think of personal cyber insurance like umbrellas on a cloudy day: agents see the storm clouds gathering and suggest buying one or having one handle, just in case. Consumers, however, often wait until the downpour already soaks them. Personal cyber insurance is today’s umbrella—better bought before the storm.