Cybersecurity and Insurance: The New Convergence MSPs Can’t Ignore

Cybersecurity and Insurance: The New Convergence MSPs Can’t Ignore

For nearly 30 years in insurance underwriting across multiple markets - including Lloyd’s of London - and a decade investing across the cyber insurance ecosystem, I’ve watched a clear pattern emerge: cybersecurity and insurance are rapidly converging.

Today, Managed Service Providers (MSPs) and Managed Security Service Providers (MSSPs) are shifting focus from tech to risk and business outcomes, engaging CFOs, CEOs, and boards alongside CISOs. Meanwhile, insurers are demanding higher cybersecurity standards as a condition of underwriting policies. Together, these forces signal a maturation of the cyber risk stack - where security and insurance reinforce each other.

The Rise of Cyber Resilience

True cyber resilience combines two pillars:

1. Security first - blocking, mitigating, and containing incidents.
2. Cyber insurance - providing the financial safety net to withstand the costs of those incidents.

Both are now essential business fundamentals for SMBs operating in a digital economy. And both sectors - cybersecurity and cyber insurance - are among the fastest growing in their respective industries.

How Insurance Is Reshaping Security Standards

The growing overlap between security and insurance is unmistakable in today’s underwriting requirements. A few years ago, insurers asked for little beyond a policy form. But the ransomware surge of 2020–2021 changed everything.

• Backups became the first essential control.
• Then came Multi-Factor Authentication (MFA), though enforcement was spotty.
• Next, Endpoint Detection and Response (EDR) was hailed as the must-have, soon followed by Managed Detection and Response (MDR) as SMBs struggled with 24/7 management.
• Most recently, Zero Trust architectures have emerged as the new “insurability frontier.”

Insurers now recognize that professional management of cybersecurity, not just tools, is critical. SMBs simply lack the internal resources to handle the complexity on their own.

The Emerging Threats for MSPs

As insurers become more hands-on, they’re starting to interfere directly with customers’ security stacks:

• Some require specific vendor partners to qualify for coverage.
• Others go further - managing entire security environments for their insured clients.

For MSPs and MSSPs, these trends present three immediate risks:

1. Rapidly changing and tightening security requirements.
2. Insurer-driven vendor mandates.
3. Potential Disintermediation, where the insurer bypasses and replaces the MSP altogether.

Turning the Threat into Opportunity

The real opportunity lies in collaboration, not competition. When MSPs provide best-in-class managed security solutions - and insurers recognize and trust those solutions - everyone wins.

That’s where SPECTRA comes in.

SPECTRA offers the first MSP certification of cybersecurity resilience recognized by global insurers. This certification unlocks service performance warranties across foundational security solutions and fosters two-way referrals between MSPs and the insurance ecosystem:

• Certified MSPs and their clients are referred to broker and insurance partners.
• Cyber insurance applicants seeking a stronger security posture are referred to certified MSPs by those same partners.

Best of all, complex cyber insurance applications aren’t needed for SPECTRA-certified MSPs and their eligible customers.

Get Certified - Stay Ahead

MSPs, MSSPs, brokers, and security vendors with channel partners can book a 20-minute discovery call to explore how the SPECTRA certification program helps them thrive at the intersection of cybersecurity and insurance.