cybersecurity insurance trends
2. Cyber-insurance pricing increased 10% from a year earlier in January, . This example lends itself to comparison to the digital world: despite growing awareness, the actual implementation of cybersecurity still leaves a lot to be desired. For starters, industry professionals advise firms who already have cyber insurance or those considering obtaining coverage for the first time to begin the process sooner rather than later. Global Cyber Risk and Insurance Survey 2022, More action required for higher cyber resilience, Up-to-date information - directly to your mailbox. CIS thought leaders identify cybersecurity trends the world might expect in 2021. Also, composite cyber insurance pricing increased 48% in the U.S. in the third quarter of 2022, continuing to outpace other products, according to Marsh's Global Insurance Market Index. As to preventive services included in the policy, services in the area of network security, backup and password management were mentioned as priorities. These clauses, substantially equivalent in terms of content, will be used in policies going forward to meet specific cyber risk requirements. Exacting cybersecurity standards must be defined and complied with by insurers and exposed industry sectors alike. Annual premiums have reached an estimated $10 billion and are expected to grow to nearly $23 billion by 2025, according to Fitch Ratings. Cyber insurance is basically . Opinions expressed are those of the author. Proactive cybersecurity reduces the impact of cyberattacks and can strengthen customer trust, reputation and business growth. How Technology-First Insurers Solves Data Problems? With respect to the scope of cover under policies, respondents would like coverage to extend to data recovery services in an emergency, a 24-hour hotline, legal advice and forensic services. The increased public focus on cybersecurity is a positive sign: democratic governments are very much aware of the priority and urgency of the task of improving cybersecurity and are addressing this politically, infrastructurally and legislatively, as the examples of the improvement in national cyber resilience in the USA and the EU Cybersecurity Strategy illustrate. The implementation of adequate cyber security requires increased investment. 3) Clients expect support, knowledge and resources. At the same time, the cyber insurance market is one of the fastest growing segments in the insurance industryand that isn't expected to change anytime soon. Only then can they protect themselves through targeted risk management. Munich Re budgets for particularly critical digital dependencies, e.g. In general, though, you can expect to pay $25 to $100 per month for cyber insurance, depending on how much coverage you want and which deductible you choose. 12. Insurtech cyber investments Where companies will be spending budgets on cyber security in 2021 $1.74bn on infrastructure spending $64.2bn on security services $545m on cloud security $10.4bn on identity access management solutions $11.6bn on security network equipment *via Feedzai Financial Crime Report Q1, 2021 Data protection Companies are more aware of their cyber risk and are looking at the insurance market to mitigate that risk. Premium trends Primary. Understanding the current cyber risks is not rocket scienceit ultimately comes down to employees doing the wrong things and companies not doing enough to stop them. Examples include the automotive cybersecurity standard ISO/SAE 21434, which will apply compulsory for all new cars from July 2022, and IEC standard 62443 on cybersecurity in industry and automation. Fraudulent Funds Transfer, or FFT, is now the leading cause of cyber-insurance claims, according to Corvus Insurance. And while attacks on large organizations like the Colonial Pipeline have captured the headlines, in fact 50% to 70% have targeted small and medium-sized companies, underscoring the wide reaching implications of this threat. Demand for cyber insurance has grown greatly in recent years. Carrier applications are getting more difficult, and underwriters want to see proof of cybersecurity protocols, such as multifactor authentication, mandatory employee cyber training and consequences for those employees that do not meet company cybersecurity requirements. Fraud and cybersecurity have largely been understood (and run) as independent of one another, yet both disciplines are a part of the broader security world. Munich Re expects these rules and regulations to be focused mainly to the issue of ransom payments and dealings with cryptocurrencies. Cybersecurity insurance claims are increasing. Alex Smith, Intermedia Cloud Communications. Some include a distributed workforce and new ransomware threats. Dean Mechlowitz and Bill Haber are the founders of TEKRiSQ, a technology company in Ponte Vedra Beach, Florida. Premiums flat to 20%. The complexities that are associated with cybersecurity and the growing cyber threat are outstripping the abilities of most organizations. IBMs 2021 Cost of a Data Breach Report estimates that the average total cost of a cyber breach is $4.24 million, with the average cost for the financial industry substantially higher at $5.72 million. Future growth: Forecasts suggest that cyber insurance will grow into a $20 billion industry by 2025. Since cyber-attacks are inevitable, it has become necessary to get yourself covered under a cyber insurance policy. 17. Requiring multi-factor authentications (MFA) for remote access to networks is the big thing that the insurance industry got in lockstep with over the last few years. Cybersecurity Skills Shortage: The evolving threat landscape is leading to a shortage of cybersecurity professionals, with an estimated gap of 3.5 million globally. RPS data found that fraudulent payments and social engineering fraud among small to medium-sized enterprises made up more than 50% of claims between January and August 2022. Awareness of the danger is a good thing, but thanks to claims volatility, it isn't as easy as it used to be to secure cyber insurance. The top trends in cybersecurity are: 1. Three cybersecurity trends with large-scale implications. The cookie is used to store the user consent for the cookies in the category "Analytics". Sometimes, cybersecurity and cyber insurance become an afterthought during product launches that focus on implementing the latest and greatest technology, but we need to stay extra vigilant in measuring our . According to ENISA, the number of supply chain attacks quadrupled in 2021 compared with 2020. Certainly, we never want our clients to be getting less coverage than they had the year before. But perhaps the most impactful change in the market is one thathigh-risk industries such as constructionhave long-been warned about: with cyber insurance no longer seen as a mere risk-mitigation tool, it falls to businesses to reduce cyber risk internally before applying for cyber insurance (see Biggest Cyber Unicorn Startups). In 2023, CaaS continues to pose a threat, requiring organizations to prioritize defense through employee training, threat intelligence and incident response solutions. The abundance of regulatory updates and revisions in 2022 promises tighter rules and regulations in 2023. . While often retention policies are being demanded by the insurers, some policy applicants are willingly taking on higher retention rates in the hopes of minimizing their premium hikes. We also use third-party cookies that help us analyze and understand how you use this website. Cyber insurance is fundamental for the successful digitalisation of the economy. A handful of accelerating technology trends are poised to transform the very nature of insurance. Social engineering attacks have outpaced ransomware ones this year, fuelled by the global shift to hybrid working. SC Media, cybersecurity experts, recently reported that cyber insurance premiums were up 5% in 2019; which, in the insurance world, are minimal increases. Trend #1: Increase in Demand With the increase in the number and cost of cyber incidents globally, more firms are recognizing they are not immune to attack and subsequently seeing enhanced utility in cyber insurance. Carriers are enhancing risk engineering and risk management capabilities. Additionally, with the growing prevalence of AI chatbots like ChatGPT, employees must be vigilant when sharing confidential information with these tools. According to a white paper produced by Intel in collaboration with key industry experts and commissioned for the UK insurance industry, there are five key questions that need to be asked: 1. Amid changes in the threat landscape, bans on ransomware payments and other cyber-related laws could crop up across the US. 14. Employee awareness and reporting of anomalies to IT administrators can greatly reduce the risk of a successful attack. This coverage protects against liability for breaches involving sensitive customer information, such as SSNs, credit card details and health records. To sort through the latest trends, we sat down this month with Emma Werth Fekkas, RVP of underwriting at Cowbell Cyber. Member of the Munich Re Board of Management. Historically, the cyber insurance marketplace had been considered soft, making it relatively easy for firms to obtain coverage at lower premiums. At the same time, cyber-insurance policy providers are indicating that current approaches won't be sustainable forever. Cloud Security: Cloud security involves shared responsibility between the provider and the customer. Businesses of all sizes should have backup and disaster recovery solutions in place along with incident response plans to protect their data from ransomware attacks. Analytical cookies are used to understand how visitors interact with the website. Compare roughly one-quarter (26%) in 2016 to one-half (47%) in 2020. There are multiple types of insurance policies you can get to protect your business. There are too many cybersecurity jobs and too few cybersecurity professionals. High-profile examples like the Operation Aurora attack on Google Gmail highlight the need for organizations to implement network segmentation and intrusion detection systems and collaborate with law enforcement to mitigate the risk of cyber espionage. RPS pointed to several themes in the cyber insurance market for the new year: Sophisticated underwriters are using third-party scanning technologies to help detect security weaknesses. For example, on a scale from one to 100, scores of 75 or over may be considered best practice, though in tightly-regulated or high-risk industries, the benchmarks would differ. Doing nothing to prevent cyber threats leaves companies vulnerable to more than just a cyberattack or breach. According to Marsh, in September 2021, clients cyber premium rates per million in coverage increased 174% compared to the 12 months prior. Beyond preparing businesses for cyber insurance, MSSPs can also help insurers in a more direct way. In Q4 of 2021, Marsh reported 60% of its clients had taken on increased retentions in an attempt to keep their premium rates at bay. Cybersecurity Insurance Trends: Key Takeaways for MSPs - N-able Blog 21st February, 2023 A guide to backup retention policy best practices Understanding backup retention policy best practices can help you ensure your backups are available when you need them weeks, months, or even years later. This cookie is set by GDPR Cookie Consent plugin. New Technologies and Devices. At the same time, only 50% reported being fully prepared" against such an incident, a Provident Bank survey found. In its 2023 US cyber market outlook, Risk Placement Services (RPS) says that insurance carriers have adapted to underwriting cyber risks even as threat actors raise or change their tactics. Gartner predicts that by 2024, organizations adopting a cybersecurity mesh architecture will reduce the financial impact of individual security incidents by an average of 90%. Flock raises $38 millon for insurance that enables quantifiably safer motor fleets, CyberSmart Raises 13M to Expand Cybersecurity Solutions, Altai Ventures launches $53mn fund to invest in insurtechs. Advanced authentication and enhanced subscriber protection measures are necessary for secure 5G experiences. Extortionists obtained ransoms averaging US$ 118,000 per successful attack (as compared to US$ 88,000 in 2020 according to Chainalysis). Big Data security solutions must offer real-time analysis and monitoring and be designed to avoid performance degradation, which leads to delays in data processing. In their analysis of cybersecurity insurance filings in statutory financial statements, Fitch estimates that "Industry DWP for cyber coverage in standalone and package policies increased by over 22% in 2020 to approximately $2.7 billion." 7 Important Cybersecurity Trends. 5 key cybersecurity trends for 2023. 3 Cyber Insurance Trends That Agents Need to Know for 2023. The global cybersecurity as a service (CSaaS) market is expected to register a CAGR of 12.6% in the forecast period (2021 - 2026). Combined with improved cybersecurity practices within organizations, this has led to rate stabilization in the marketplace. Cyber insurance policies typically require EDR because it helps to reduce the risk of a cyber attack. Throughout these investigative processes, insurers are working more closely with cybersecurity professionals to better understand where cyber risks lie at an organization. However, as we reported last year, the cyber insurance . Dont worry about the news anymore, through our newsletter youll receive weekly access to what is happening. This is why, for example, insurers are treading with trepidation around building reputational damage into business and cyber packages. Expertise from Forbes Councils members, operated under license. In Munich Re's opinion, 2021 was not an exceptional year from a cyber perspective. Do I qualify? Contact our team to learn more about how we can help your firm protect and grow your business. In auto insurance, risk will shift from drivers to the artificial intelligence (AI) and software behind self-driving cars. Global premiums for cyber insurance are predicted to grow from US$ 9.2 billion in 2022 to US$22 billion by 2025, with some estimates suggesting they could reach over US$ 60 billion by 2029. Organizations in and outside of Ukraine have faced various cyber threats, including large-scale DDoS attacks, heightened malware activity, targeted phishing campaigns, disinformation operations and attacks on cyber-physical systems. At Munich Re, the development of know-how on data analytics and tools for processing relevant internal and external data is long underway. the usage of cloud services of major providers, in its accumulation scenarios. An increase to just over US$ 300bn is expected in 2022. Cyber insurance is an insurance product designed to help businesses hedge against the potentially devastating effects of cybercrimes such as malware, ransomware, distributed denial-of-service (DDoS) attacks, or any other method used to compromise a network and sensitive data. In particular, the looming costs of a potential breach are applying additional pressure on firms to protect themselves from the possibility of staggering losses. In order for the market to remain viable and sustainable, these are necessary changes that need to happen. These exclusions must be worded transparently and unambiguously. Independent Insurance Agents & Brokers of America, Inc. Do You Know How Much Insurance Fraud Costs the Industry? In 2023, its importance will only increase, as coverage becomes a seal of approval, indicating the organisations strong cyber security posture to customers, partners and peers. In 2021 alone, the Conti group of hackers the most lucrative service provider extorted or earned at least US$ 180m from victims (Chainalysis). Amid changes in the threat landscape, bans on ransomware payments and other cyber-related laws could crop up across the US. And for some, coverage will simply become unattainable. All industry sectors are interested in cyber insurance. Here are three important things that agents need to know to be successful in the cyber market in 2023: 1) Cybercrime will continue to increase,particularly against small businesses. The sustainability of the cyber insurance market can be further improved with better resilience and innovative coverage of residual risks. Fraudulent Funds Transfer (FFT) is a type of cyber-attack where criminals use social engineering tactics to trick Accounts Payable (AP) staff into transferring funds to illegitimate bank accounts.. FFT is closely linked with Business Email Compromise (BEC). Carriers have basically raised the bar for entry for cyber insurance, increasing the information security requirements for organizations to qualify, Robinson toldInsurance Business. 1. For Robinson, the jurys still out on whether banning ransomware payments can decrease the frequency of attacks. To secure against evolving cyber threats, businesses in 2023 must adopt advanced security technologies, continually test and update controls and educate employees on cyber risks. Subscribe. Those agencies that can differentiate themselves in the evolving cyber market stand to reap the rewards for years to come. Cyber Hygiene: Cyber hygiene is the practice of keeping computer systems and devices secure. One way in which insurers are responding is by establishing tighter security control requirements of applicants. Attackers rely on a mix of tried-and-tested methods as well as their own expanding repertoire of tactics and approaches. The cyber insurance market has transitioned over the last few years: Capacity has tightened, rates continue to rise, and underwriters are looking much more closely at what risks they will write. An adequate level of cybersecurity increases insureds resilience and, at the same time, is a prerequisite for access to the insurance market. The range of cyber products still needs to be made better publicised and the additional benefits of those products (i.e. The coverage limits with regard to the resilience of portfolios are mapped in accumulation scenarios, continuously monitored and, if necessary, adjusted.
