Given the speed at which the digital economy, technological and AI landscape is developing, young people need to be educated on how to mitigate the associated risks with a combination of cyber insurance and risk management practices. This is an important part of building financial literacy and preparing the youth to nurture a sense of responsibility that will set them in good stead for a financially secure future.
The eSport industry, which has seen the professionalisation of online and console gaming, has gained immense popularity in South Africa. In fact, South Africa is officially the fastest-growing eSports market in the Middle East and Africa region, with several schools and universities across the country amending curriculums to incorporate eSports education and training. Developments such as these point to the fact that the eSport industry is here to stay and will play a central role in how adults of the future will live, work and play online. However, those who compete and play in the eSports arena on a professional level will need to bear in mind that any goods used to derive an income cannot be insured on a personal policy.
The rise of digitalisation has also been accompanied by a dramatic increase in cybercrime, with South Africa now ranking as the #1 cybercrime hotspot in Africa. Some of the most common cyber-attacks involve ransomware, identity fraud and the theft and sale of data. In addition, digital industries such as eSports and virtual reality as well as their associated risks, has emphasised the need to educate young people about how to mitigate their unique risks.
These sentiments can also be applied to the online shopping sector, which in South Africa, has experienced an exponential boom in recent years. The proliferation of e-commerce and online shopping has also necessitated a high volume of important data such as payment details and personal information being shared via online platforms. This exposes online shoppers to several different kinds of fraud and data theft risks.
Cyber insurance is a key component of effective risk management and provides individuals with a way to protect data and ensure that the integrity of digital and computing assets is maintained. ‘Cyber-hygiene,’ is the term that most accurately represents the practices and principles young people will become more reliant on as their lives become ever more digital.
But it’s not only cyber risks that have become increasingly prominent in the insurance landscape today. Parents also need to consider educating their children about insuring assets like wearable technology. Smartwatches, fitness trackers and portable technology like iPads, tablets and laptops are now commonplace assets amongst young adults, and the cost of replacing these items should they be lost or stolen, can be substantial.
A good place to start as a parent or guardian wanting to educate young adults about the role of short-term insurance is to speak to an adviser to get the appropriate insights. For example, children need to understand that a risk profile is unique to each individual and a number of factors such as age, claims behaviour, daily travel habits, where they live and how they store their valuables are taken into account to determine their level of risk, and ultimately their insurance premium.
It’s also important for young people to understand that their behaviour and the level of responsibility they demonstrate in taking care of their assets will affect their risk profile in future. Sharing this knowledge with our youth forms an important part of teaching children how to be financially responsible and make informed decisions around their valuable belongings and ultimately, their financial wellbeing.
By Ryno de Kock – Head of Distribution at PSG Insure
