Small and medium-sized businesses (SMBs) face increasing cyber threats but often lack the resources for robust cybersecurity or expensive traditional insurance policies. Current cyber insurance models are static, slow, and reactive, leaving SMBs vulnerable to financial and operational damage from breaches. A dynamic cyber insurance platform tailored for SMBs could bridge this gap by integrating real-time risk assessment and automated responses.

How It Would Work

The platform could continuously monitor a business's cybersecurity posture by connecting to its existing tools (like firewalls or endpoint protection). Artificial intelligence could analyze this data to adjust insurance premiums in real time—rewarding improved security with lower costs. Key features might include:

• Automated underwriting and instant claims processing for common incidents (e.g., ransomware)
• Bundled cybersecurity services (like threat monitoring) to reduce risks
• Dynamic pricing that incentivizes proactive security upgrades

For example, a retail business with outdated software might see higher premiums until it patches vulnerabilities, while one that adopts recommended tools could qualify for discounts.

Why It’s Needed

SMBs, especially in high-risk sectors like healthcare or retail, are prime targets for cybercriminals but often can’t afford traditional insurance or dedicated IT teams. Meanwhile, insurers struggle to accurately price policies without real-time data. A platform like this could align incentives:

• SMBs get affordable, tailored coverage and tools to mitigate risks.
• Insurers gain a new market with data-driven risk models.
• Cybersecurity providers access customers through bundled services.

Existing solutions like static policies from firms such as Chubb or Hiscox don’t offer real-time adjustments or automated claims. More integrated options, like Coalition, lack dynamic pricing. This approach could fill that gap while creating a "data moat" over time—the more businesses use it, the better its risk models become.

Getting Started

A phased approach could help validate the idea:

1. Start with a basic MVP offering static policies for a narrow industry (e.g., dental clinics), testing automated ransomware claims.
2. Integrate with a few common cybersecurity tools to pilot real-time risk scoring.
3. Expand to dynamic pricing and partnerships with security vendors.

Early challenges—like SMBs lacking tools to integrate—could be addressed by including basic free security software with policies. Regulatory hurdles might require starting in flexible markets and collaborating with insurers to demonstrate the model’s benefits.

By making cyber insurance adaptive and accessible, this platform could help SMBs navigate growing threats while opening a underserved market for insurers.