The objective of this series is to provide clients with the highest quality insights and expertise on the changing and evolving cyber insurance marketplace. Robinson recommends that organizations partner with a third-party assessor to investigate vulnerabilities in their networks. She offers any number of insights, including that those constant rate rises are likely a . Today, companies are more aware of their cyber risk and are looking at the insurance market to mitigate that risk. The common trend among insurers today is to look at what controls businesses have in place and how responsive they might be in the event of a cyberattack. Additionally, with the growing prevalence of AI chatbots like ChatGPT, employees must be vigilant when sharing confidential information with these tools. Cybersecurity Ventures forecasts that with further annual rate increases of 15% the loss will amount to roughly US$ 10.5tn in 2025. Please turn on JavaScript and try again. The public sector, including education, also faces fewer options for risk transfer after the pull-out of several carriers from the space due to skyrocketing claims (see TOP 15 U.S. Cyber Insurance Companies). Cyber Hygiene: Cyber hygiene is the practice of keeping computer systems and devices secure. Cyber insurance is fundamental for the successful digitalisation of the economy. Communication is strengthening among governments, law enforcement, corporations, and . This was a trend also observed by Munich Re in the past year. This website uses cookies to improve your experience while you navigate through the website. 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. Based on estimates from Fitch, a credit-rating agency, insurance company payouts on claims, known as the direct loss ratio, jumped from 47 cents for every dollar in earned premiums in 2019 to 73 cents in 2020. The range of cyber products still needs to be made better publicised and the additional benefits of those products (i.e. 7. This is the dilemma both insurers and businesses will grapple with in 2023. Businesses will similarly feel the benefits of MSSPs involvement in the process of seeking cyber insurance, as they will have a reason to work harder to improve their overall cyber resilience, and do so against clear benchmarks. Customer notication and call center services. 9. This outside perspective is invaluable to them in the aftermath of an attack now, amidst soaring demand for coverage, insurers should look to enlist similar expert help to demystify cyber risk, even before the worst comes to pass. Its important for agents and brokers to understand that were still in a growth phase, not just in terms of demand and premium, but also in how carriers are managing the risk and its evolution.. 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. 16. 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. The insurance industrys focus lies on clear wording, an adequate level of security and comprehensive transparency on risk information. It reveals what's driving the increase in premiums and how the market will evolve in response to growing threats such as ransomware. 6: Distributed decisions Executive leaders need a fast and agile cybersecurity function to support digital business priorities. This comes from our 2022 Cyber Insurance Market Trends Report, based on a survey of 400 decision makers in cyber insurance across the US and UK. To counter this, companies should adopt quantum-resistant encryption algorithms using quantum random number generators instead of relying on vulnerable traditional pseudo-random number generators. [M] Munich Re / [P] Stanislaw Pytel / Getty Images. Logic would tell you that the bad guys wouldnt attack entities because theres no money for them to get. The cyber-insurance sphere must keep up with ransomware developments. Recovery and replacement of lost or stolen data. Premium trends Primary. After several years of significant losses, carriers are limiting their cyber exposure with more. Between 2016 and 2019, the costs of cyberattacks to U.S. insurers almost doubled. But such measures could have immense bearing on public entities, which are among the least prepared for cyberattacks. Annual premiums have reached an estimated $10 billion and are expected to grow to nearly $23 billion by 2025, according to Fitch Ratings. For example, ransomware programs can be rented on the dark web for US$ 40 a month. If cyberattacks continue to rise, then the cyber insurance market will continue to evolve and change in order to meet the needs of policyholders. Please enable scripts and reload this page. Meanwhile, victims and their insurers scramble to try to stay one step ahead of the bad guys, as rates rise - then rise some more. Slowly but surely, though, security . When attacks strike, insurers call on IR experts to verify whether the client legitimately had all the protective measures in place they said they did when applying for coverage. Certain sectors will also need to work harder to meet cyber insurance requirements. As a result, businesses are turning to cyber-insurance for business continuity. Cybersecurity Ventures estimates global spending on cybersecurity in 2021 to have be US$ 262.4bn in 2021. Do I qualify? The public sector, including education, also faces fewer options for risk transfer after the pull-out of several carriers from the space due to skyrocketing claims. As the practice proliferates, its not only individual businesses, but also the wider industry which is set to reap the rewards in 2023 and beyond. 5G Security: 5G security protects high-speed mobile services for billions of devices and the IoT. Alongside lower coverage limits, some insurers are reconsidering coverage altogether for certain cyber incidents such as ransomware. For insurers, a single attack can trigger losses with a great many insureds. In Munich Res opinion, 2021 was not an exceptional year from a cyber perspective. AUTHORS: Pete Bowers COO at NormCyber, Steve Robinson Area President & National Cyber Practice Leader for Risk Placement Services, Cybercriminals love to exploit seasonal opportunities, and consumers are facing a perfect storm of rising prices in the middle of the busiest shopping season of the year, As we look back on the cyber insurance marketplace, we see all the hallmarks of a hardening market, with no signs of relief as we move into 2022, The estimated insurance claims bill from the sequence of earthquakes that hit Turkey and Syria earlier in February appears to be growing, For the global reinsurance industry, activities in 2022 and renewals for 2023 were set against a backdrop of significant economic and geopolitical uncertainties, ILS plays a key role in allowing catastrophe risk to be transferred from the commercial insurance market to investors, providing additional (re)insurance capacity, Global commercial property and casualty (P&C) insurancelines have delivered strong financial performance in recent years following the soft market of 2013 to 2018, Saudi Arabias Insurance Market Outlook: Growth & Digitalisation, Global Cyber Crime, Fraud & Ransomware Survey, 10 Basic Tips to Avoid a Potential Victim of Ransomware. Future growth: Forecasts suggest that cyber insurance will grow into a $20 billion industry by 2025. Subscribe. The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". How IoT Technology is Reshaping Insurance Business? Cybercrime As A Service (CaaS): CaaS is a dangerous business model by which cyber criminals offer hacking services and tools on the dark web for anyone to launch a cyberattack, including nontechnical individuals. Cybersecurity insurance claims are increasing. The economics of cyber insurance Laying the baseline for emerging trends in the cyber insurance market, Schein said the cost of insured cyber attacks grew by 22% in 2020 and 77% in 2021, but rates for cyber insurance grew much faster. Employee awareness and reporting of anomalies to IT administrators can greatly reduce the risk of a successful attack. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features. In current data compliance dominated economies, the legal complexities . This is important for insurers, as they want to ensure a level of security to minimize their potential losses in the . To sort through the latest trends, we sat down this month with Emma Werth Fekkas, RVP of underwriting at Cowbell Cyber. 5. The total global economic loss due to cyber-crime is difficult to estimate. The increase in remote work, cloud usage, AI and the IoT expands the attack surface, making it imperative to stay alert. Only then can they protect themselves through targeted risk management. Cyber insurance is no longer deemed a nice-to-have accessory for businesses. 5 Trends to Ride in 2023. By acting as a black box within businesses, they can enable the notion of cyber health to be viewed on a more empirical basis than before. MSSPs understand what insurers are looking for when evaluating candidates and they can work with them to proactively plug any cyber security weak spots (see 10 Basic Tips to Avoid a Potential Victim of Ransomware). 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. While ransomware attacks get the biggest headlines, most cyberattacks occur because of a simple phishing campaign where an employee clicks a bad link or sends proprietary information. Some insurers charge as little as $10 a month for $25,000 worth of coverage. Fraudulent Funds Transfer (FFT) is a type of cyber-attack where criminals use social engineering tactics to trick Accounts Payable (AP) staff into transferring funds to illegitimate bank accounts.. FFT is closely linked with Business Email Compromise (BEC). According to The National Association of Insurance Commissioners (NAIC), the number of written cyber insurance policies in force increased by 21.3% from 2019 to 2020. In 2021, it was estimated approximately US$ 6tn. Since cyber-attacks are inevitable, it has become necessary to get yourself covered under a cyber insurance policy. Our offering increases our insureds resilience and improves the protection of digital business models. At the same time the vast majority of C-Level respondents confirm that adequate cyber security is still an issue within their companies. They will make endorsements around the vulnerabilities scanned, and if not addressed, these could impact an organizations coverage. MSSPs prove their worth by running comprehensive assessments over organisations people, processes and technology controls, leaving no stone unturned. Together with our clients and partners, we will continue to successfully and sustainably shape the cyber insurance market. Read more. 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. Likewise, with the rising cost of premiums, some firms themselves are making the decision to reduce their coverage in exchange for a less costly policy. Cyberattacks are increasing every year as bad actors find easy targets in companies of all sizes, particularly small to medium-sized businesses. These incidents can do a lot of damage to a company's network and result in serious costs to the business. The cyber insurance market has never been more confusing. Organizations are trying to fill the worldwide gap of 3.4 million cybersecurity workers," according to (ISC), a nonprofit association composed of information security leaders. Regional opportunities, Latest trends and dynamics . The global cybersecurity as a service (CSaaS) market is expected to register a CAGR of 12.6% in the forecast period (2021 - 2026). In 2023, cyber hygiene remains vital to protect personal information from theft and corruption. Realistically, however, this will not be easy for all suppliers to fully implement, though common security standards, strict risk management in the supplier segment and good documentation of critical dependencies in the supply chain will help reduce the risks. However, the heightened cyber risks and exponential growth of ransomware attacks in particular over the last year has led to a hardening of the marketplace. Alex Smith, Intermedia Cloud Communications. Cyber insurance generally covers liability in the event of an attack (like ransomware) or breach where sensitive data may be compromised, whether that's social security numbers, driver's license numbers, payment card information, and health records; anything that is identifiable to an individual. According to our primary respondents' research, the Cyber Insurance market is predicted to grow at a CAGR of roughly 24.90% during the forecast period. At the same time, cyber-insurance policy providers are indicating that current approaches won't be sustainable forever. But they have gotten out of certain industry groups that are poor performers, such asK-12 school districts, or cities and municipalities.. There are multiple types of insurance policies you can get to protect your business. The strength of cyber insurers lies in providing excellent incident response (IR) and offering support when clients need it the most. In our own research on personal cyber insurance, we found that people weren't aware of the real costs of . 2017-2023 ACA Group. 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. To help guide this research and to receive actionable data on premium rates, coverage limits, and more, take the 2022 Aponix Cyber Insurance survey here. Find out more in ESET's Cybersecurity Trends 2023: Securing Our Hybrid Lives report. SMBs may find it hard to retain cyber insurance, which is the next trend. 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. Demand for cyber insurance has grown greatly in recent years. Doing nothing to prevent cyber threats leaves companies vulnerable to more than just a cyberattack or breach. A complication for cyber-insurance: FFT on the rise. . They can ask the right questions, carry out assessments or penetration testing, as well as guide businesses to reach the required level of cyber resilience faster. 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. We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. Our experts continually refine our internal models on the basis of our own and third-party data, and with a particular focus on accumulation risks. One factor is the increase in new technologies and new devices. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. These cookies track visitors across websites and collect information to provide customized ads. Further, 88% of small business owners felt their business was vulnerable to a cyberattack," according to an SBA survey. Receiving less media attention was an attack in the US state of Florida in which a hacker attempted to tamper with the supply of chemicals at a water treatment plant and thus poison water supplies. Companies are more aware of their cyber risk and are looking at the insurance market to mitigate that risk. Remote Workforce Security: To ensure secure remote and hybrid work, organizations should implement strong security protocols such as VPNs, multifactor authentication and endpoint/mobile device security solutions. Cyber-insurance is expected to become a $20 billion market by 2025. Premiums flat to 20%. The percentage of insurance clients opting for cyber coverage rose. The increase in the number and severity of cyber attacks in 2020 and 2021 has triggered significant changes to the cyber insurance marketplace. This development affects a multitude of sectors, including the insurance sphere. 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 other words, companies that aren't proactive about cyber risk management will not be considered insurable going forward. 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. Cyber Insurance: Top Five Trends for 2022. Particularly noticeable was the fact that smaller companies and government institutions often continue to be inadequately protected and are therefore more at risk overall. Cybersecurity Skills Shortage: The evolving threat landscape is leading to a shortage of cybersecurity professionals, with an estimated gap of 3.5 million globally. Both incidents show that, big game hunting, i.e. Join 300,000 other insurance professionals today. In collaboration with various industry participants and in consultation with Munich Re, the Lloyds Market Association (LMA) has published four standard clauses to exclude cyber war from coverage. This cookie is set by GDPR Cookie Consent plugin. This shortage will continue to be a concern in 2023, forcing companies to invest in training and retaining talent or outsourcing cybersecurity tasks. While some are optional, some are required. 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. Cyber insurance is basically . The Cyber Insurance market was. Internet Of Things (IoT) Security: IoT security protects cloud-connected devices from data breaches. It looks like your browser does not have JavaScript enabled. For the insurance industry, it is therefore vitally important to continue to tailor the range of cyber products to customer requirements and increasing digital dependencies. Ransomware-as-service is also on the rise; its predicted to be among the biggest threats to face the cyber market in the next few years. Analytical cookies are used to understand how visitors interact with the website. These cookies will be stored in your browser only with your consent. The Cybersecurity Insurance research report provides a comprehensive outlook of the market size and an industry growth forecast for 2023 to 2028. Cybersecurity Ventures forecasts that with further annual rate increases of 15% the loss will amount to roughly US$ 10.5tn in 2025. Turtlefin acquired Bengaluru-based SaaS insurtech Last Decimal, Former insurance executive indicted for $2bn fraud scheme to deceive state Regulators, Insurtech Veridion secured $6mn to deepen AI comprehension of the business landscape, 2023 U.S. Key trends in the current market for cyber insurance include the following: Increasing take-up. Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet. Ultimately, firms who do not provide the proper documentation and/or do not have the required controls in place may not be considered for coverage altogether or may incur higher premiums and/or lower coverage limits to account for their perceived added risk. As we look ahead, these are the top five trends we anticipate seeing in 2022. As a result, insurers are focusing more intensely on risk selection by asking more questions and requiring more documentation to evaluate firms cyber programs. Dont worry about the news anymore, through our newsletter youll receive weekly access to what is happening. India was in the top three nations that have experienced a lot of ransomware attacks. Ransomware and cyber-attacks on both supply chains and critical infrastructures pose a greater threat than ever to companies and society. Cyber insurance buyers enjoyed expanding coverage terms, plentiful capacity and flat to falling rates in a highly competitive marketplace. Cyber Insurance: Best practices such as multi-factor authentication (MFA), secure configuration, defined patch periods, and others will be mandated as a precursor to policy underwriting. Addressing security risks from unsecured IoT devices and sensors is critical to fully realize 5G's potential. Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors. Beyond preparing businesses for cyber insurance, MSSPs can also help insurers in a more direct way. Three cybersecurity trends with large-scale implications. These exclusions must be worded transparently and unambiguously. Some criminal perpetrators also cooperate with state actors. 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." Northeastern University defines multi-factor authentication as a system in which users must use two . Cyber-insurance pricing increased 10% from a year earlier in January, . The report focuses on Cybersecurity Insurance Market size, share, growth status, future trends, volume, and key market dynamics. Munich Re supports insureds and companies in developing their own resilience and responsiveness and thereby enables them to satisfy the preconditions for access to the cyber insurance market. , and the number of material breaches rose by nearly 25%. With October internationally recognised as Cyber Security Awareness Month*, it's a good time to explore some of the key trends in the cyber insurance world. Ransomware losses have dropped in the past few months, but they have increased in severity. Risk Placement Services (RPS) says that insurance carriers have adapted to underwriting cyber risks even as threat actors raise or change their tactics. On the insurance side, they will invest more in tools for underwriting cyber risk, portfolio management and high-end cybersecurity risk mitigation services to their insureds. 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. These cookies ensure basic functionalities and security features of the website, anonymously. Amid changes in the threat landscape, bans on ransomware payments and other cyber-related laws could crop up across the US. Cyber-Physical Systems (CPS) Security: Cyber-physical systems, including transportation, energy and critical infrastructure, pose security challenges as they become interconnected and autonomous. The sustainability of the cyber insurance market can be further improved with better resilience and innovative coverage of residual risks. AXAs decision is a response to the growing losses incurred from ransomware attacks by insurers as well as pressure from government officials who claim cyber insurance payouts are contributing to the rise in ransomware attacks. Social engineering tactics involve using manipulation to gain access to cybersecurity weaknesses. The proportion of decision-makers surveyed who were still undecided about arranging cover remained unchanged at 35%. beyond pure risk transfer) better explained to potential insureds. All rights reserved. CEO of Codeproof, a cybersecurity firm that specializes in providing easy-to-use, modern mobile device management software to businesses. Munich Re budgets for particularly critical digital dependencies, e.g. Some include a distributed workforce and new ransomware threats. Cybersecurity authorities in the USA, the UK and Australia are also seeing a worldwide increase in the threat to critical infrastructure. Amid changes in the threat landscape, bans on ransomware payments and other cyber-related laws could crop up across the US. Similarly, the number of insurers offering cyber insurance increased by about 35% between 2016 and 2019. 1. On the one hand, UK businesses face a plethora of pressures from rising cyber insurance premiums an increase of66%year-on-year by 2022 Q3 and shrinking coverage (see about Global Cyber Market). The imbalance of supply and demand in the cyber insurance market has resulted in soaring premium rates. Thecyber insurance market is still evolving, but according to Robinson, whats clear is that insurance providers can no longer be an organizations only risk management strategy. All industry sectors are interested in cyber insurance. Ransomware-as-service is also on the rise; its predicted to be among the biggest threats to face the cyber market in the next few years. At Munich Re, the development of know-how on data analytics and tools for processing relevant internal and external data is long underway. As risk becomes easier to quantify, insurers may feel more confident to offer lower premiums over time, which may attract more businesses to seek coverage over the longer term. Title Insurance Industry outlook switched to negative, Insurtech Lemonade shared Q4 2022 results: premium reached $625 mn, a 64% increase, Insurtech Rootshared Q4 2022 results: written premium a ~23% decrease to $122 mn, Malaysias Insurtech PolicyStreet received license for operate in Australia, Insurtech Kanguro launches pet insurance in Florida, Insurtech Kita secured 4mn led by Octopus Ventures to combating climate change, UNIQA Insurance Group improved 2022 consolidated earnings to EUR 425 mn. Carriers have basically raised the bar for entry for cyber insurance, increasing the information security requirements for organizations to qualify, Robinson toldInsurance Business. Munich Re supports government and private-sector initiatives to curb ransomware, such as the Ransomware Task Force (RTF) initiated by the US Institute for Security and Technology, and is also a member of the EU-wide No More Ransom initiative. Cyberattacks are becoming more sophisticated, but so are insurers. Other systemic risks however, are not insurable in the private sector. 3 Cyber Insurance Trends That Agents Need to Know for 2023. This cookie is set by GDPR Cookie Consent plugin. Annual premiums have reached an estimated $10 billion and are expected to grow to nearly $23 billion by 2025, according to Fitch Ratings. Cybersecurity must be integrated into software, system design, coding and implementation. Technical cybersecurity solutions for the insurance industry must focus on access controls, data behavior, the encryption of large data volumes, and the prevention of data leaks. Munich Re continues to offer capacity, and our goal as market leader is clear: to jointly develop innovative, datacentric cyber solutions with our clients and partners. Here are the top 20 cybersecurity trends to keep an eye on: 1. Phishing uses fake websites to obtain personal information. 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. Cyber-attacks are up by 93%.In 2020, more than 60% of companies were subject to ransomware demands. In 2021, cyberattacks on all sizes of companies were up 15%, according to a report by ThoughtLab, and the number of material breaches rose by nearly 25%. Sign up for our newsletter and be informed about new articles about your favourite topics. Internet of Things in Insurance. In-depth industry statistics and market share insights of the Cybersecurity Insurance sector for 2020, 2021, and 2022. However, you may visit "Cookie Settings" to provide a controlled consent. 14. As a key part of a comprehensive cybersecurity strategy, cyber insurance helps mitigate risks and offers peace of mind. Cyber insurance buyers enjoyed expanding coverage terms, plentiful capacity and flat to falling rates in a highly competitive insurance marketplace. 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 . Businesses must and will continue to manage the following issues: Cyber health is not the only unquantifiable factor in the cyber space risk is similarly elusive. This is why, for example, insurers are treading with trepidation around building reputational damage into business and cyber packages. 17. Nobody wants to pay the ransom. You may be trying to access this site from a secured browser on the server. Certain classes exceeding 400%. After several years of significant losses, carriers are limiting their cyber exposure with more coverage restrictions and refusing to waste time on bad risks. This is the nature of their relationship but it is not an exclusive one, since they usually dont work alone. Exacting cybersecurity standards must be defined and complied with by insurers and exposed industry sectors alike. In addition to providing a better understanding of cyber risks, these methods and tools are used to develop innovative, datacentric solutions that go beyond pure risk transfer.