Where There’s Smoke, There’s Venture Capital
Robert Regis Hyle | July 21, 2014
If we needed any more reason to believe cybersecurity is top of mind for American insurance carriers, we have this: According to CNN: “Venture capital firms are expected to funnel $788 million into early-stage cybersecurity startups this year. That's a 74 percent increase from last year's $452 million, according to PrivCo, a financial data provider on privately-held companies. In 2011, VC firms invested just $160 million in cybersecurity startups. PrivCo estimates the funding will be dispersed among about 40 cybersecurity startups in the early stages of funding.”
While some traditional companies have increased their investment in cybersecurity offerings, the market certainly is ripe for start-ups and the influx of venture capital. After all, who was discussing cybersecurity before 2011? Certainly security analysts were on the beat, but breaches were not getting the attention they deserved, at least until Target came along and U.S. consumers felt violated.
It also comes as no surprise that CNN reports the area of cybersecurity that is gaining the most focus is mobile malware. Cybersecurity companies targeting that particular market are extremely popular with the money men.
Insurers, and all businesses, should welcome this focus as so much business is being conducted today on mobile devices. I spoke with an insurer recently who reports that between 25 and 40 percent of his company’s new business is now being conducted on mobile devices. When you consider that percentage has increased from zero just five years ago, that’s stunning.
As security consultant Bryant Tow wrote on this website earlier this year:
“The biggest obstacle I see with regard to information security is complacency and resistance to change, especially in mature organizations that have been operating a certain way for many years. The attitude, ‘We have always done it this way,’ will land you right out of business.
Budget line items for cyber security are rarely allocated until after the breach. By then it is too late. The more appropriate question is not whether you are a target but are you prepared for the attack when it comes.”
At least insurers understand, through mobile technology, that their customers don’t want to do it business the way they used to. Getting that through their heads will enable them to also understand going mobile is dangerous in today’s world if you don’t have some protection.
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The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.
ITA LIVE 2019
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ITA LIVE 2019 will present real-life examples of true startup technologies that are helping insurers gain real advantage -- and a competitive edge -- in the marketplace. We’ll highlight the more successful InsurTech partnerships, while offering case studies that demonstrate exciting innovation and cutting-edge techniques impacting all aspects of the insurance ecosystem.
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