The ‘Silent Cyber’ in Professional Indemnity Cover with Chris Davies

Welcome to the latest episode of the Sense of Identity podcast. In this instalment (Episode 13), we dive into the intricacies of financial advice and regulation, as well as the evolving landscape of cybersecurity insurance with Chris Davies, Executive Director of Howden.

With a career spanning several decades in the financial services industry, Chris brings a wealth of knowledge and experience, particularly in the areas of business growth and regulation.

Join us as we uncover the strategies that businesses can employ to ensure they remain resilient against risks while capitalising on growth opportunities.

Key Takeaways

• Learn about the challenges and opportunities presented by the rapid evolution of technology in the financial services sector.
• Discover the significance of cybersecurity, including the concept of 'silent cyber' and its implications for professional indemnity cover.
• Recognise the necessity of adapting business practices to meet the changing regulatory landscape and customer expectations.

Interview Summary

Q: Welcome, Chris, to our podcast. Could you start by giving us a bit of background about your history in the financial services industry?

A: Certainly, I've been fortunate to work with very innovative firms and people throughout my career. My focus has always been on growth, finding businesses to help them expand, and making day-to-day processes more efficient. My journey began as a financial adviser, I moved into regulation, and then to the private side of the industry, always with a keen interest in how to make the lives of advisers easier.

Q: Transitioning to Howden seems like a big move. What excited you about joining Howden?

A: Howden is a massive organisation globally, and I was drawn to the opportunity to use my experience with a different focus. It was exciting to think about the scale of Howden and the brand's meaning in the context of my experiences. Joining Howden allowed me to leverage my understanding of advisers' day-to-day challenges in a new way.

Q: Could you elaborate on the importance of professional indemnity insurance in financial services?

A: Professional indemnity insurance is crucial because it's about understanding and managing the risks associated with advice given, sometimes years ago, but claimed against today. It's an art, really, to balance the insurer's needs with the adviser's day-to-day realities. We strive to ensure insurers understand the evolving nature of advisory work to address risks appropriately.

Q: We've also discussed the concept of 'silent cyber' and its impact. Could you explain what that means for our listeners?

A: 'Silent cyber' refers to insurance policies that neither explicitly include nor exclude cyber coverage, leading to ambiguity. Lloyd's conducted a review to ensure policies responded consistently to cyber incidents, pushing insurers to explicitly state whether their policies include or exclude cyber coverage. This move essentially removed any ambiguity, making it clearer for businesses to understand their coverage.

Q: Given the low uptake of cyber insurance among financial advisers, what are your thoughts on the risks and necessities of being prepared for cyber threats?

A: It's surprisingly low, which is concerning given the evolving cyber threats. Cybercriminals don't discriminate by business size, making everyone a potential target. It's crucial for firms to recognise the importance of cyber insurance as part of their risk management strategies. Being prepared and having a response plan in place is vital for dealing with cyber incidents effectively.

Q: Finally, if you could give a piece of advice to your younger self, what would it be?

A: I'd tell my younger self to listen more and talk less. There's so much to learn from others' experiences, and being open to that knowledge can significantly impact your personal and professional growth.

Chris's experiences and observations offer a roadmap for businesses in the financial sector to navigate the intricacies of growth, regulation, and cybersecurity, ensuring they are well-positioned to thrive amidst the uncertainties of today's digital world.

Reviewed by

Sam Kendall, 07.06.24

Sabrina McClune, 07.06.24