First-party cyber coverage protects your data, including employee and customer information. Throughout these investigative processes, insurers are working more closely with cybersecurity professionals to better understand where cyber risks lie at an organization. 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. Dive Brief: Rate pressures on the cyber industry sector began to moderate as a surge in new buyers, and corporate enforcement of cyber hygiene led to a more stable market, according to research from global insurance firm Marsh released Wednesday. But such measures could have immense bearing on public entities, which are among the least prepared for cyberattacks. 2017-2023 ACA Group. These incidents can do a lot of damage to a company's network and result in serious costs to the business. On the other hand, insurers can only do so much to help businesses get their house in order. This coverage protects against liability for breaches involving sensitive customer information, such as SSNs, credit card details and health records. In 2021, cyberattacks on all sizes of companies were up 15%, according to a report by. Certain sectors will also need to work harder to meet cyber insurance requirements. Despite hard conditions in the market, Robinson encourages agents and brokers not to approach cyber insurance with a negative lens. 5. 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. 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. 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. Organizations must stay informed and compliant with evolving regulations to secure their systems against cyber threats. . Our offering increases our insureds resilience and improves the protection of digital business models. The UK and US cyber insurance market is rife with complexity. 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 Ransomware business reached a new peak last year and is attracting more and more criminals. In addition, EDR can provide evidence that an organization has taken appropriate measures to protect its environment and data. Companies can address and mitigate the disruptions of the future only by taking a more proactive, forward-looking stancestarting today. Exacting cybersecurity standards must be defined and complied with by insurers and exposed industry sectors alike. Cyber Insurance: To safeguard against financial losses from a data breach, organizations may obtain cyber insurance. As we look ahead, these are the top five trends we anticipate seeing in 2022. In particular, the looming costs of a potential breach are applying additional pressure on firms to protect themselves from the possibility of staggering losses. After several years of significant losses, carriers are limiting their cyber exposure with more coverage restrictions and refusing to waste time on bad risks. Cyber insurance may seem like uncharted territory, as threats are hard to anticipate and risk remains elevated. All industry sectors are interested in cyber insurance. Several leading cyber insurance carriers documented these trends in their own studies. We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. Both incidents show that, big game hunting, i.e. Annual premiums have reached an estimated $10 billion and are expected to grow to nearly $23 billion by 2025, according to Fitch Ratings. The provider is responsible for securing the infrastructure, access, patching and configuration of hosts/networks, while the customer is responsible for managing users and access privileges, protecting cloud accounts, encrypting/protecting data and maintaining compliance. Also referred to as cyber risk insurance or cybersecurity insurance . Business decision-makers cited cyber threats as their No. The cyber insurance industry has been facing challenges in recent years due to rising rates, mass cyber-attacks, and stricter policy terms. 5G Security: 5G security protects high-speed mobile services for billions of devices and the IoT. 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. The imbalance of supply and demand in the cyber insurance market has resulted in soaring premium rates. The definition of insurability is key for the sustainability of the market, particularly as regards systemic risks and the extent to which these can be insured. Cyber insurance buyers enjoyed expanding coverage terms, plentiful capacity and flat to falling rates in a highly competitive marketplace. In our own research on personal cyber insurance, we found that people weren't aware of the real costs of . Cybersecurity Trends in 2023. 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. 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. In order for the market to remain viable and sustainable, these are necessary changes that need to happen. In Munich Res opinion, 2021 was not an exceptional year from a cyber perspective. 3 Cyber Insurance Trends That Agents Need to Know for 2023. It is virtually impossible to quantify the risk. 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. DOWNLOAD PDF. In September 2021, Marsh reported 23% of its clients experienced either a voluntary or involuntary decline in coverage. Today, companies are more aware of their cyber risk and are looking at the insurance market to mitigate that risk. These exclusions must be worded transparently and unambiguously. Cybersecurity Ventures forecasts that with further annual rate increases of 15% the loss will amount to roughly US$ 10.5tn in 2025. 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." 2023 trends for the cyber insurance market RPS pointed to several themes in the cyber insurance market for the new year: "Inside-out" underwriting Sophisticated underwriters are using. Managed security service providers (MSSPs) can do this for them, and in 2023, their role will become more pronounced. . As a key part of a comprehensive cybersecurity strategy, cyber insurance helps mitigate risks and offers peace of mind. 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. At the same time, only 50% reported being fully prepared" against such an incident, a Provident Bank survey found. 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. 1 concern for the third time in four years in the 2022 Travelers Risk Index. By clicking Accept All, you consent to the use of ALL the cookies. Ransomware losses have dropped in the past few months, but they have increased in severity. Internet of Things in Insurance. The total global economic loss due to cyber-crime is difficult to estimate. There are multiple types of insurance policies you can get to protect your business. However, trends at the end of 2022 suggest that there . 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. Social engineering tactics involve using manipulation to gain access to cybersecurity weaknesses. In this market environment, we will be seeing more and more new players and participants covering risk: InsurTechs, managing general agents (MGAs) or alternative means of securitisation (ILS/ART), in which public-private partnerships may also engage in the future in order to protect areas of particular social relevance. Cyber Insurance: Top Five Trends for 2022. Attackers rely on a mix of tried-and-tested methods as well as their own expanding repertoire of tactics and approaches. There is a huge opportunity for agencies that can prove their value by offering cyber expertise and resources that their clients wouldn't otherwise have access to, especially considering the growing talent drought in the cybersecurity workforce. 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 . 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. Companies are more aware of their cyber risk and are looking at the insurance market to mitigate that risk. 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). Key practices include regularly changing passwords, configuring firewalls, encrypting data and backing up data. 14. Cyber Hygiene: Cyber hygiene is the practice of keeping computer systems and devices secure. 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. This cookie is set by GDPR Cookie Consent plugin. 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. Phishing And Social Engineering: These attacks manipulate individuals through deceit. 10. For Robinson, the jurys still out on whether banning ransomware payments can decrease the frequency of attacks. An adequate level of cybersecurity increases insureds resilience and, at the same time, is a prerequisite for access to the insurance market. 12 Insurance Industry Trends for 2022. In Munich Re's opinion, 2021 was not an exceptional year from a cyber perspective. Following one such attack on Colonial Pipeline, fuel shortages and panic buying temporarily paralysed regional infrastructure on the US East Coast and made headlines worldwide. Although challenges exist with talent shortages, climate risk, increased regulatory requirements, and managing the technology/human balance, insurers can leverage the lessons of the past year to get closer to providing a . The cybersecurity service provider Gartner estimates that, by 2025, 60% of companies will deem cybersecurity to be a key component in their IT procurement evaluation process. MSSPs can support insurers first and foremost by helping businesses qualify for cyber insurance more easily. 2) Carrier appetite for cyber risk depends on the insured's cyber hygiene. We are in constant dialogue with our cedants and model providers regarding current cyber threats and accumulation scenarios to ensure that our approaches are state-of-the-art at all times. This cookie is set by GDPR Cookie Consent plugin. Cyber insurance policies typically require EDR because it helps to reduce the risk of a cyber attack. At Munich Re, the development of know-how on data analytics and tools for processing relevant internal and external data is long underway. Regional opportunities, Latest trends and dynamics . Further, 88% of small business owners felt their business was vulnerable to a cyberattack," according to an SBA survey. While 88% of company boards regard cybersecurity as a business risk rather than solely a technical IT problem," only 13% of boards have actually instituted a cybersecurity-specific board or committee, according to a cybersecurity report from Gartner. Ransomware losses have dropped in the past few months, but they have increased in severity. Cloud Security: Cloud security involves shared responsibility between the provider and the customer. Geopolitics And Hybrid Warfare: The reality of geopolitics and hybrid warfare has been redefined since the Russian conflict. However, these policies were never priced to account for cyber warfare thats accompanying an armed conflict, or major cloud breaches that could simultaneously affect millions of cyber policyholders at the same time, Robinson said. This shortage will continue to be a concern in 2023, forcing companies to invest in training and retaining talent or outsourcing cybersecurity tasks. 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. For example, access to the insurance market requires fundamental resilience-enhancing measures, such as access management, robust network security, the continuous patching of vulnerabilities and the presence of backups. ; Half of Marsh's U.S. clients purchased standalone cyber insurance policies in 2021, almost double the 26% of clients in 2016. Insurers are also leaning on supplemental applications related to firms history with ransomware and high-profile cyber breaches as an attempt to piece together firms inherent risk. Available to download is a free sample file of the Cybersecurity Insurance report . 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. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc. By contrast, a standard business impact assessment can set a business back many thousands of pounds, putting them out of pocket before they can get any true value for their money. 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. India was in the top three nations that have experienced a lot of ransomware attacks. 7 Important Cybersecurity Trends. Cyberattacks are becoming more sophisticated, but so are insurers. Satellites, drones, and real-time data sets will give insurers unprecedented visibility into the risk around facilities . Criminal extortion in cyberspace is becoming ever more professional and complex and is often carried out by agile, coordinated criminal networks. While some are optional, some are required. 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%. These cookies track visitors across websites and collect information to provide customized ads. [313 Pages Report] The global Cybersecurity Insurance Market size is projected to grow from USD 11.9 billion in 2022 to USD 29.2 billion by 2027, at a CAGR of 19.6 during the forecast period. 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. If those trends continue, prices could be set to decline, said Tom Reagan, Marsh's cyber practice leader. The solution wont come from either side, but somewhere else entirely: managed security service providers (see 5 Most Important Cybersecurity Controls). Eighty-two percent of cyber insurers expect pricing to keep going up for the next two years, according to Panaseer's 2022 Cyber Insurance Market Trends Report. 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? So where does increased demand, tighter terms, rising premiums, and lower coverage limits leave firms? Insurers will be focusing even more strongly on the targeted analysis and use of data. Digital Life Insurance. Organizations are improving their cyber hygiene. 18. The risk situation remains extremely dynamic. 13. The cyber insurance market has never been more confusing. On the one hand, UK businesses face a plethora of pressures from rising cyber insurance premiums - an increase of 66% year-on-year by 2022 Q3 - and shrinking coverage (see about Global Cyber Market ). We continue to see ransomware attacks as the number one cyber threat. The cyber-attack was discovered in time, so the population of the town of Oldsmar, near Tampa, was ultimately not in danger. 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. The cyber insurance market will continue to respond to a changing threat landscape, but also will be shaped by business, economic and regulatory forces. 2022 Cyber Insurance Market Trends Report. 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. telecommunications or the power supply), as well as a possible cyber war, exceed the limits of insurability and are consequently excluded. In other industries, reputational damage tends to occur in the aftermath of one-off events such as natural disasters and can often be predicted to some extent (see Global Cyber Crime, Fraud & Ransomware Survey). There were more than 700,000 cyberattacks on small businesses in 2020, totaling $2.8 billion in damages, according to the Small Business Administration. Premium trends Primary. Specifically, if firms are determined to be of high risk, insurers are less likely to offer them a higher coverage limit or coverage altogether. 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. 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. This was a trend also observed by Munich Re in the past year. 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. Augmented Reality/Virtual Reality (AR/VR) Security: As AR/VR usage increases, securing these technologies and the data they handle must be a priority to prevent the hacking and theft of sensitive information like credit card data and passwords through subtle facial movements recorded during speech. Munich Re significantly contributes to a sustainable market, which is essential for our clients. She offers any number of insights, including that those constant rate rises are likely a . One factor is the increase in new technologies and new devices. Internet Of Things (IoT) Security: IoT security protects cloud-connected devices from data breaches. And for some, coverage will simply become unattainable. 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. 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. 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. 6: Distributed decisions Executive leaders need a fast and agile cybersecurity function to support digital business priorities. Find out more in ESET's Cybersecurity Trends 2023: Securing Our Hybrid Lives report. The failure of cloud services or a multi-client data breach, for example, are covered. Premium increases 30-150%. Cyber-insurance is expected to become a $20 billion market by 2025. To sort through the latest trends, we sat down this month with Emma Werth Fekkas, RVP of underwriting at Cowbell Cyber. Critical vulnerabilities grew significantly in 2021, with an increase of approximately 20% (Tenable). 1. Opinions expressed are those of the author. Price increases. Your budget should include obtaining the required insurance policies according to state and local laws. However, as we reported last year, the cyber insurance . Logic would tell you that the bad guys wouldnt attack entities because theres no money for them to get. CNA Financial alone paid a record sum of US$ 40m to members of the Phoenix hacker group. Is Your Organizations Privacy Program Equipped to Tackle the Road Ahead? Do I qualify? The following is the first blog post in a multi-part series on cybersecurity insurance produced by ACA Aponixs Thought Leadership Team. Beyond preparing businesses for cyber insurance, MSSPs can also help insurers in a more direct way. However, you may visit "Cookie Settings" to provide a controlled consent. During this same time period, the number of cyber policies increased by about 60%. In other words, companies that aren't proactive about cyber risk management will not be considered insurable going forward. Insurers will have a busy year as rapid growth is expected to continue. Demand for cyber insurance is currently growing more steadily than the capacity on offer. The problem is thats not always the case, such as ransomware-as-a-service which are more indiscriminate attacks, he said. 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. Two new phishing tactics have successfully evaded anti-malware systems: PY#RATION and Blank Image Attacks. The early approach whereby attackers specialised decryption and later on exfiltration of stolen data is evolving to include multiple extortion schemes. 1. Cybersecurity must be integrated into software, system design, coding and implementation. also, according to NetDiligence's Cyber Claims Study, between 2016 and 2020, the average cost to an insurer for a cybersecurity claim was $145,000 for . Munich Re supports government and private-sector initiatives to curb ransomware, such as the Ransomware Task Force (RTF) initiated by the US Institute for Security and Technology, and is also a member of the EU-wide No More Ransom initiative. January 28th is Data Privacy Day, a reminder that organizations should review their privacy obligations. The proportion of decision-makers surveyed who were still undecided about arranging cover remained unchanged at 35%. RPS data found that fraudulent payments and social engineering fraud among small to medium-sized enterprises made up more than 50% of claims between January and August 2022. Cyber Espionage: Cyber espionage refers to unauthorized access of sensitive data or IP for economic, competitive or political gain through cyberattacks. According to a white paper produced by Intel in collaboration with key industry experts and commissioned for the UK insurance industry, there are five key questions that need to be asked: 1. Carriers are enhancing risk engineering and risk management capabilities. In 2023, its importance will only increase, as coverage becomes a seal of approval, indicating the organisations strong cyber security posture to customers, partners and peers. All of these players will make use of expertise that has already been developed in the insurance market. It reveals what's driving the increase in premiums and how the market will evolve in response to growing threats such as ransomware. These high costs are ultimately driving firms to trade in the possibility of large losses for a less costly alternative by seeking cyber insurance coverage. Munich Re sees cyber premiums worldwide standing at US$ 9.2bn (beginning of 2022) and estimates that they will reach a value of approximately US$ 22bn by 2025. This trend is primarily driven by the increase in the number of ransomware gangs, the success of their campaigns, and the absence of consistent security controls and data protections in the enterprise.