As technology transforms the economy, businesses of all sizes have to navigate a new kind of risk: digital risk.

The most successful brokers will need to be prepared to help their clients navigate these complex risks. Our "Cyber Savvy Broker" series highlights forward-thinking brokers with the knowledge and skills to help their clients navigate this digital transformation.

This month, we chatted with Denis Panariti, Management Liability & Cyber Risk Specialist for Gallagher Canada. Denis shared how he's worked through complicated placements while dealing with stubborn IT teams and how new insurance professionals can excel in the industry.

How did you begin your career in insurance?

I started my insurance career about 11 years ago when I was introduced to a contract opportunity at AIG, and I've primarily been on the management liability side of the business. 

I started with management liability, otherwise known as Directors and Officers Liability (D&O). Much like cyber, it was one of those lines of business that wasn't a priority for most private company clients. First, you had to really help them quantify and understand the exposure, and then sell what the policy could do for them. You had to hit the right nerve to make sure they understood the benefits.

I spent a little over four years at CNA managing a team of underwriters focused on management liability and financial institutions, and from there, I decided to move onto the broking side to specialize in D&O and Cyber full-time. It's been about a year since I started really honing in on Cyber, but I've always been involved with this space.

How did you learn about cyber insurance and get up to speed so you could sell it?

Nearly 10 years as an underwriter helped. In my opinion, the best brokers out there are better equipped if they have an underwriting background. 

Cyber is an ever-evolving and changing area, and it's not a matter of learning it once, and that's it. You've got to keep up with it. Otherwise, the knowledge you have becomes outdated within a three-month period. So newsfeeds, insurer data, publications, industry blogs, cyber vendors, conferences, and anything else in between are how I stay on top of the changes.

It's too easy to fall behind and for your knowledge to become outdated when we're dealing with this space.

What is the most complicated deal you've worked through, and how did you keep it moving forward?

I was working on a significant manufacturing risk about six months ago. They had limited cybersecurity controls in place when they needed top-notch security. Their in-house IT team had a bit of an ego. I kept hearing, "We've got it covered. We don't need insurance. We don't need outside help. I appreciate you offering an assessment, but I don't need one."

It's a situation that's tough to navigate because you're dealing with people, and people can sometimes get defensive. So my job is to be as upfront and honest with them about their exposures as possible. I'm willing to have these difficult situations because, at the end of the day, I need to make sure that they understand the exposures they’re facing, even if it's an inconvenient truth for them to hear.

Sometimes it takes getting in front of the board and/ or management and saying, "We need to bring in some vendors or some people that can help you beef up your security. We aren't replacing your IT infrastructure or people. It’s just going to complement and increase your defenses. It's going to serve you well in the long term."

Often the message gets across, but it is sometimes challenging. Getting the right stakeholders at the client level to commit the funds and time to improve their cyber posture was crucial in solving that problem. In the end, the client will understand and appreciate the role I played. It was uncomfortable initially, but they understood why I had to hold my ground, and the relationship got stronger because we've built trust and a healthy feedback loop to share ideas and concerns. 

What do you usually recommend when you're looking for insurance partnerships for your clients?

First and foremost, I ensure that what a client buys is not just a piece of paper. It's a promise to be there when things go wrong, and that the carrier has the know-how to handle the situation in the least disruptive way to the business. 

I'm selling a promise. I'm just an intermediary in that process. It's also important that a carrier can pay claims and handle those claims in the most efficient way possible.

What's different with cyber is that carriers are not just providing risk transfer, but also an end-to-end solution that includes pre-breach and pre-claims education. They're also providing post-breach and post-event education and awareness around what's going on in the market.

I like this space because a cyber policy is more than just an insurance policy. If you pair up with the right partner, you can have an end-to-end solution. You can manage that risk throughout a policy instead of just transferring it.

What advice would you give somebody transitioning into insurance or just starting?

I led a team of 12 at CNA before I moved over to the broking side, and the one thing I used to tell my team all the time was to be a sponge when you're first starting out. Learn from the knowledge that's surrounding you. Shadow the people that are doing well. Figure out their secret sauce, or see if they'll share it. Get a mentor—or three. 

Many insurance companies and brokers are now willing to spend on their employees' continuing education needs to further their skills, so take them up on that. Focus on mastering the basics in a specific line of business. Then, when you're five to seven years into your career, it will serve you well.

What do you think the insurance industry has done well to evolve, and where do you see areas of improvement?

As an industry, we finally recognized that we need to utilize technology more than ever. Efficiency is vital nowadays because of the continually thinning margins. So platforms work really well with small and medium-sized businesses. However, I think the future for brokers is probably focusing on some enterprise businesses instead of the smaller businesses that can be handled via a platform. 

Improve your cyber knowledge with Coalition

Cyber insurance is one of the fastest-growing insurance products and a massive opportunity for brokers to grow their book of business. Coalition's Cyber Savvy program equips you with the tools and knowledge to deepen your cyber risk expertise and advise (and protect!) your clients.

You can access more free Cyber Savvy Broker resources to continue your learning journey.