An Agent of Record is a designated individual or entity given the authority to represent and manage specific aspects of a client’s interests, typically in insurance or advertising sectors. Essentially, the AOR acts as the intermediary, liaising between the client and third-party providers like insurers or media outlets.
AOR in different sectors
While AORs are prominent in the insurance world, where they manage policy placements and renewals, they’re also pivotal in the advertising sector. Here, an advertising agency, as the AOR, manages a brand’s media purchases, placements, and overall advertising strategy, ensuring consistency and optimal impact.
Key functions of an AOR
Representation. The AOR stands as the primary contact between a client and third-party providers. All communications, negotiations, and transactions are funneled through the AOR.
Administration. From handling paperwork to ensuring timely renewals and compliance, the AOR manages administrative tasks, allowing clients to focus on core business activities.
Expertise. Given their specialized knowledge, AORs offer strategic insights and advice, ensuring clients get the best deals, coverage, or placements.
Negotiation. The AOR can leverage its relationships and understanding of the industry to negotiate favorable terms for clients.
When to reconsider your AOR?
At some point, you might need to sign an AOR or broker of record (BOR) letter, especially in the following situations.
You appoint your first-ever AOR or broker.
You switch your current broker due to high premiums or inadequate service.
You seek a more proactive AOR.
You’re dissatisfied with the current agent’s service.
There’s a communication gap with your existing AOR.
You discover an agency with more expertise tailored to your sector.
For instance, if you’re in the tech industry and discover an agent specializing in cybersecurity
What is cybersecurity? Cybersecurity encompasses the techniques and processes aimed at protecting computer systems, networks, and data from digital threats, unauthorized access, or damage. It involves deploying security measures, including firewalls, antivirus software, and intrusion detection systems, coupled with user education and stringent security policies.
With hybrid wars that include cyber attacks today, the importance of cybersecurity, common threats, and best practices for protection is essential.
What does cybersecurity do?
Protecting sensitive data. Cybersecurity shields personal and corporate data from theft, damage, or unauthorized modification. According to Verizon's 2023 report, data breaches have increased by 33% over the past year, emphasizing the need for robust data protection.
Preventing unauthorized access. Cybersecurity practices involve implementing measures like multi-factor authentication and access controls. A study by IBM found that unauthorized access was a primary cause of 43% of data breaches.
Maintaining privacy. This function of cybersecurity is essential for safeguarding user data against illicit tracking and collection. Privacy laws like GDPR in the EU have put a spotlight on the importance of privacy in cybersecurity.
Ensuring continuity of business operations. Cybersecurity prevents disruptions caused by cyberattacks. For example, the WannaCry ransomware attack of 2017 caused an estimated $4 billion in worldwide losses.
Legal and regulatory compliance. Non-compliance with laws like HIPAA can lead to heavy fines. For example, HIPAA violations can cost up to $1.5 million per incident.
Building trust. Effective cybersecurity practices enhance customer confidence. Surveys indicate that 85% of consumers value privacy and data protection when choosing companies to do business with.
Cybersecurity is integral to modern business operations, offering protection against a wide range of digital threats and ensuring compliance with legal standards. It safeguards data and plays a vital role in maintaining business continuity and building customer trust.
Common cybersecurity threats
These are some of the most common threats modern companies have to face.
Malware encompasses various forms of harmful software, including viruses that can replicate themselves, worms that spread across networks, trojans that disguise themselves as legitimate software, and ransomware that locks users out of their systems until a ransom is paid. The impact of malware can be severe: for example, the WannaCry ransomware attack we mentioned above affected more than 200,000 computers across 150 countries.
Phishing attacks involve deceptive emails or websites that trick individuals into revealing sensitive information like passwords or credit card numbers. The FBI’s Internet Crime Report noted that phishing was the most common type of cybercrime in 2020.
Man-in-the-middle attacks (MitM). This form of eavesdropping intercepts communication between two parties to steal or alter the data. A common example is a hacker intercepting data on an unsecured Wi-Fi network.
Denial of service (DoS) attacks flood systems, servers, or networks with traffic to exhaust resources and bandwidth, rendering the service unusable. One of the most notorious DoS attacks was against Dyn, a major DNS provider, in 2016, disrupting internet platforms and services.
SQL injection involves inserting malicious code into SQL-using databases via a vulnerable website, which can then be used to access and manipulate confidential data. For example, in 2019, a SQL injection attack exposed the data of over 1 million customers of an Australian telecommunications company.
Zero-day exploits target unknown vulnerabilities in software or hardware, making them particularly dangerous as they occur before the vendor becomes aware and fixes the issue. The Stuxnet worm, discovered in 2010, is one of the most famous examples of a zero-day exploit.
Best practices for IT and cyber protection
Here are some things you can do as an individual or as a business owner to protect your personal and sensitive data from the simplest attacks and cyber threats.
1/ Strong passwords and multi-factor authentication. Strong, unique passwords, coupled with MFA, significantly heighten security. According to Verizon's Data Breach Investigations Report, 81% of hacking-related breaches leveraged either stolen and/or weak passwords.
2/ Regular software updates. Consistently updating software and systems helps patch security vulnerabilities. Microsoft reported that updating systems could prevent 85% of targeted cyberattacks.
3/ Employee training and awareness. Training staff on cybersecurity risks is essential. IBM’s Cyber Security Intelligence Index found that 95% of cybersecurity breaches are due to human error.
4/ Firewalls and antivirus software. These tools are fundamental in safeguarding against various cyber threats. The use of antivirus software can detect and block nearly 100% of known malware.
5/ Data encryption. Encrypting sensitive data, both in transit and at rest, is critical. A study by the Ponemon Institute showed that encryption can significantly reduce the cost of a data breach.
6/ Regular backups. Backing up data ensures recovery in the event of an attack. Companies that regularly back up and encrypt their data can reduce the impact of data breaches significantly.
7/ Incident response plan. An effective response plan can reduce the cost of a data breach by as much as 40%, according to IBM’s Cost of a Data Breach report.
8/ Secure Wi-Fi networks. Securing wireless networks is vital. A survey by Symantec revealed that 60% of consumers believe their Wi-Fi networks are secure, but only 50% have taken steps to secure them.
9/ Vulnerability assessments and penetration testing. Regular testing and patching of vulnerabilities are key. Cisco’s Annual Cybersecurity Report highlighted that 42% of organizations faced public scrutiny after a security breach.
10/ Limiting user access. Implementing the principle of least privilege can significantly reduce risks. A study by Forrester found that 80% of security breaches involve privileged credentials.
What kind of specialists provide IT and cyber protection?
As cybersecurity is so complex and varied, it demands many skills from its providers. What used to be done by one person today is covered by five specialists and more. Here are some of the job positions you can find in cybersecurity and a short explanation of what these people do.
Cybersecurity Analyst monitors networks for security breaches, investigates violations, and implements protection solutions.
Network Security Engineer designs, implements, and maintains network security solutions to protect against cyber threats.
Information Security Manager oversees and coordinates the company’s information security policies and procedures.
Chief Information Security Officer (CISO) is a high-level executive responsible for the overall strategy and direction of information security in an organization.
Ethical Hacker/Penetration Tester simulates cyber attacks to identify and fix security vulnerabilities.
Security Software Developer develops security software, such as encryption technologies and firewall programs.
IT Security Consultant advises on best practices for protecting companies’ IT infrastructure and data.
and dedicated tech services, switching might be beneficial.
More about AOR letter
Clients retain the freedom to change their AOR, reflecting shifts in their strategic needs or dissatisfaction with current services. Such a switch often involves an official letter detailing the transition and ensuring that all parties are on the same page.
An AOR letter is an official declaration made by the business owner, designating their chosen representative for insurance matters. It authorizes this agent to negotiate terms, manage policies, and oversee other insurance-related tasks on behalf of the company. Importantly, when a new AOR letter is signed, it typically ends the association with the previous agent.
Key points before signing an AOR letter
While appointing a new AOR is straightforward, careful consideration of the agreement is crucial. Key points to remember are:
Signing a new AOR means ending the relationship with your current agent.
Be vigilant; brokers might not always be upfront about certain terms.
Understand potential servicing fees, especially if you change AORs mid-term.
The AOR transition process
The procedure to appoint a new AOR typically spans around ten days:
The proposed agent drafts an AOR letter mentioning the necessary details.
You, the policyholder, review, sign, and return the letter.
The agent forwards the signed AOR to the insurance provider.
The transition is finalized in approximately 5-10 days, barring any interventions.
Upon the insurance company’s approval of the AOR letter, the old agent’s involvement concludes, and the new association begins.
***
An AOR offers a streamlined, expert-backed approach to managing your interests. Businesses keen on maximizing outcomes and minimizing hassles would do well to leverage the power of a dedicated AOR.
