the usage of cloud services of major providers, in its accumulation scenarios. In order for the market to remain viable and sustainable, these are necessary changes that need to happen. Alex Smith, Intermedia Cloud Communications. Insurers offer protection and thereby support the productivity and capabilities of insureds. The sustainability of the cyber insurance market can be further improved with better resilience and innovative coverage of residual risks. The increase in remote work, cloud usage, AI and the IoT expands the attack surface, making it imperative to stay alert. The early approach whereby attackers specialised decryption and later on exfiltration of stolen data is evolving to include multiple extortion schemes. Now, three quarters into 2022, the market is clearly showing signs of improvement: New capacity and insurers continue to enter the market. Cybersecurity Ventures forecasts that with further annual rate increases of 15% the loss will amount to roughly US$ 10.5tn in 2025. The cyber insurance market has never been more confusing. Proactive cybersecurity reduces the impact of cyberattacks and can strengthen customer trust, reputation and business growth. 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). 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. This coverage protects against liability for breaches involving sensitive customer information, such as SSNs, credit card details and health records. For insurers, a single attack can trigger losses with a great many insureds. Ransomware is becoming more common - and expensive. The imbalance of supply and demand in the cyber insurance market has resulted in soaring premium rates. 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). 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. 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. An increase to just over US$ 300bn is expected in 2022. Addressing security risks from unsecured IoT devices and sensors is critical to fully realize 5G's potential. The risk transfer associated with services is an essential element of risk management for companies. 9. Subscribe. Available to download is a free sample file of the Cybersecurity Insurance report . The objective of this series is to provide clients with the highest quality insights and expertise on the changing and evolving cyber insurance marketplace. 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. Cybersecurity Ventures forecasts that with further annual rate increases of 15% the loss will amount to roughly US$ 10.5tn in 2025. 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. Certain sectors will also need to work harder to meet cyber insurance requirements. However, to attain coverage, businesses need to demonstrate good cyber health credentials in the first place creating a vicious cycle where neither goal can be reached without achieving the other. In addition, EDR can provide evidence that an organization has taken appropriate measures to protect its environment and data. 5 key cybersecurity trends for 2023. 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%. Read on to set your policies. Annual premiums have reached an estimated $10 billion and are expected to grow to nearly $23 billion by 2025, according to Fitch Ratings. 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. If cyberattacks continue to rise, then the cyber insurance market will continue to evolve and change in order to meet the needs of policyholders. Cybersecurity authorities in the USA, the UK and Australia are also seeing a worldwide increase in the threat to critical infrastructure. Such a cyber resilience score then gives insurers a clear metric to assess candidates and clients by. With all the data and scores at their disposal, insurers are able to quantify their own risk, too, and make better-informed decisions as they navigate the increased demand for their services. This coverage typically includes your business's costs related to: Legal counsel to determine your notication and regulatory obligations. These factors have resulted in an overall downward trend in coverage limits. 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). CIS thought leaders identify cybersecurity trends the world might expect in 2021. However, trends at the end of 2022 suggest that there . These exclusions must be worded transparently and unambiguously. Social engineering attackshave outpaced ransomware ones this year, fuelled by the global shift to hybrid working. Cyber insurance trends to watch in 2023 Cyberattacks are becoming more sophisticated, but so are insurers. Employee awareness and reporting of anomalies to IT administrators can greatly reduce the risk of a successful attack. Cyber insurance buyers enjoyed expanding coverage terms, plentiful capacity and flat to falling rates in a highly competitive insurance marketplace. Particularly noticeable was the fact that smaller companies and government institutions often continue to be inadequately protected and are therefore more at risk overall. Ransomware business reached a new peak last year and is attracting more and more criminals. Internet Of Things (IoT) Security: IoT security protects cloud-connected devices from data breaches. The problem is that they need much more information than is currently available to them, something akin to the wealth of empirical data health and car insurers can benchmark against (see Top Cybercrime Predictions for 2023). 14. Despite hard conditions in the market, Robinson encourages agents and brokers not to approach cyber insurance with a negative lens. Enhanced scrutiny by insurers and rising premiums are impacting the amount of coverage available to firms. 6: Distributed decisions Executive leaders need a fast and agile cybersecurity function to support digital business priorities. In other words, companies that aren't proactive about cyber risk management will not be considered insurable going forward. The major factors driving the market include the increasing number of sophisticated cyber-attacks amplifying the fear of financial losses . New Technologies and Devices. 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. 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. 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. Compared with the previous year, thesurvey shows that cyber insurance is becoming increasingly popular. In general, the cyber market as a whole is expected to continue its growth into 2020. 12 Insurance Industry Trends for 2022. Social engineering attacks have outpaced ransomware ones this year, fuelled by the global shift to hybrid working. 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. It is virtually impossible to quantify the risk. 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. Rates experienced a significant uptick following the Colonial Pipeline and Kaseya attacks in the summer of 2021. 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. Risk Placement Services (RPS) says that insurance carriers have adapted to underwriting cyber risks even as threat actors raise or change their tactics. Munich Re expects these rules and regulations to be focused mainly to the issue of ransom payments and dealings with cryptocurrencies. Advanced authentication and enhanced subscriber protection measures are necessary for secure 5G experiences. 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%. And it is not only in Germany that the situation is tight to critical (BSI). 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. Volatile er insurance business can only be written sustainably and reliably for clients under these conditions. The proportion of decision-makers surveyed who were still undecided about arranging cover remained unchanged at 35%. 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. So where does increased demand, tighter terms, rising premiums, and lower coverage limits leave firms? They will make endorsements around the vulnerabilities scanned, and if not addressed, these could impact an organizations coverage. 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. 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. 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 cyber insurance market will continue to respond to a changing threat landscape, but also will be shaped by business, economic and regulatory forces. A Key Benefits of Innovation & Applied AI Technologies? Supply Chain Security: This is the management of potential risks in the entire supply chain, including external suppliers, logistics and technology. Logic would tell you that the bad guys wouldnt attack entities because theres no money for them to get. In other words, companies that aren't proactive about cyber risk management will not be considered insurable going forward. Such actors are often motivated politically or otherwise to cause maximum disruption or even the destruction of processes and systems, in order to trigger economic and political instabilities. How Technology-First Insurers Solves Data Problems? Is Your Organizations Privacy Program Equipped to Tackle the Road Ahead? We also use third-party cookies that help us analyze and understand how you use this website. Please turn on JavaScript and try again. Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. At Munich Re, the development of know-how on data analytics and tools for processing relevant internal and external data is long underway. She offers any number of insights, including that those constant rate rises are likely a . Prominent losses feature in the news cycle and continue to raise awareness of the threat of cyber attacks. 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. Keep your journey safe with more . Carriers have basically raised the bar for entry for cyber insurance, increasing the information security requirements for organizations to qualify. It involves policies, technologies and programs aimed at reducing identity-related risks and improving business security. 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. 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. Whereas in the past it was not uncommon for a midsize firm to have $10 million in coverage, that same firm today is likely only being offered $5 million or less by most carriers. It looks like your browser does not have JavaScript enabled. 1. 5. Prompt injection attacks on AI chatbots can reveal sensitive information about their inner workings and pose a significant threat to the security of the system. Sign up today for ACA news, alerts, and events. In fact, the chief executive of Zurich, one of Europe's largest . The number of companies that already have cyber insurance increased by 20%. 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. There are multiple types of insurance policies you can get to protect your business. 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. 2022 Cyber Insurance Market Trends Report. You may be trying to access this site from a secured browser on the server. 19. Northeastern University defines multi-factor authentication as a system in which users must use two . Price increases. 2017-2023 ACA Group. 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. But in some instances, it could be important to have that as an option.. The range of cyber products still needs to be made better publicised and the additional benefits of those products (i.e. Some include a distributed workforce and new ransomware threats. Companies can address and mitigate the disruptions of the future only by taking a more proactive, forward-looking stancestarting today. Cyber insurance buyers enjoyed expanding coverage terms, plentiful capacity and flat to falling rates in a highly competitive marketplace. Cyber attacks on the healthcare sector up by 71% ISP/MSP up by 67% Communications +51% Government and military sector up by 47% We experienced an all-time high in cyberattacks during 2021, with Q4 taking the most blows. And payouts are costly to insurers. 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. Many large enterprises do what it takes to bring their level of risk down to a level they can live with and afford. The third quarter increase was a 40 percentage point rise over the prior quarter, and the largest since 2015. The following is the first blog post in a multi-part series on cybersecurity insurance produced by ACA Aponixs Thought Leadership Team. 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. Prominent losses feature in the news cycle and continue to raise awareness of the threat of cyber attacks. . Future growth: Forecasts suggest that cyber insurance will grow into a $20 billion industry by 2025. The European Union Agency for Cybersecurity (ENISA) recognised and analysed the increased risk from cyber-attacks on or via supply chains in its Threat Landscape for Supply Chain Attacks report. The dynamic of the above-mentioned transitions as well as the rising frequency and severity of cyber incidents will become manifest in an increasing demand for cyber insurance. 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. [30] The COVID-19 pandemic is likely to have a significant impact on cyber loss activity. 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. As a key part of a comprehensive cybersecurity strategy, cyber insurance helps mitigate risks and offers peace of mind. This was a trend also observed by Munich Re in the past year. Threat actors are increasingly resorting to supply chain security attacks with the potential for widespread impact. 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. These clauses, substantially equivalent in terms of content, will be used in policies going forward to meet specific cyber risk requirements. Those agencies that can differentiate themselves in the evolving cyber market stand to reap the rewards for years to come. They rose by 89% in the fourth quarter of 2021, according to Risk Strategies State of the Market 2022 Report. This is why, for example, insurers are treading with trepidation around building reputational damage into business and cyber packages. 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. Regional opportunities, Latest trends and dynamics . Premium trends Primary. 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 . Not only large corporations recognise the value of effective security management; medium-sized companies, organisations, cities, municipalities and hospitals are likely to continue to invest. Prioritized security measures, such as changing default passwords, prevent threats like Mirai malware. 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. [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. ; Half of Marsh's U.S. clients purchased standalone cyber insurance policies in 2021, almost double the 26% of clients in 2016. In September 2021, Marsh reported 23% of its clients experienced either a voluntary or involuntary decline in coverage. In Munich Res opinion, 2021 was not an exceptional year from a cyber perspective. At the same time, only 50% reported being fully prepared" against such an incident, a Provident Bank survey found. For example, Hiscox, a leading cyber carrier, showed $1.8 billion in cyber losses in 2019, which was up 50% from the prior year. 12. At the same time the vast majority of C-Level respondents confirm that adequate cyber security is still an issue within their companies. 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. As to preventive services included in the policy, services in the area of network security, backup and password management were mentioned as priorities. 2023 Q1 State of the Cyber Market. 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. Sophisticated underwriters are using third-party scanning technologies to help detect security weaknesses. But such measures could have immense bearing on public entities, which are among the least prepared for cyberattacks. This cookie is set by GDPR Cookie Consent plugin. Cyberattacks are increasing every year as bad actors find easy targets in companies of all sizes, particularly small to medium-sized businesses. A handful of accelerating technology trends are poised to transform the very nature of insurance. The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". 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. January 28th is Data Privacy Day, a reminder that organizations should review their privacy obligations. The risk situation remains extremely dynamic. After several years of significant losses, carriers are limiting their cyber exposure with more. Meanwhile, victims and their insurers scramble to try to stay one step ahead of the bad guys, as rates rise - then rise some more. Ransomware losses have dropped in the past few months, but they have increased in severity. Cyberattacks are becoming more sophisticated, but so are insurers. 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. Dont worry about the news anymore, through our newsletter youll receive weekly access to what is happening. Attackers rely on a mix of tried-and-tested methods as well as their own expanding repertoire of tactics and approaches. Subscribe to our Newsletter to increase your edge. Similar to a deductible, a retention clause specifies the portion of damages policyholders will be responsible for paying before the insurance policy kicks in. 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. Here's what we know about the size of the cyber insurance industry so far: Market size: According to the latest available data, the global cyber insurance market was worth $7.8 billion in 2020. Cyber-insurance trends for 2023. Nobody wants to pay the ransom. We continue to see ransomware attacks as the number one cyber threat. Demand for cyber insurance is currently growing more steadily than the capacity on offer. 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. Current predictions of the size of the global cyber insurance market suggest rapid growth will occur over the next five years, with the total market size increasing from around eight billion U.S.. Insurers will be focusing even more strongly on the targeted analysis and use of data. But such measures could have immense bearing on public entities, which are amongthe least prepared for cyberattacks. Not every successful attack is immediately known to or comprehensively understood by the victim. 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. . Three cybersecurity trends with large-scale implications. However, when properly secured and monitored, AI and ML can also be used to improve cybersecurity defenses and mitigate potential threats. Also referred to as cyber risk insurance or cybersecurity insurance . MSSPs can score organisations cyber resilience based on the effectiveness of their security and data protection processes, the behaviour of their employees and the robustness of their technology infrastructures. 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. 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. Managed security service providers (MSSPs) can do this for them, and in 2023, their role will become more pronounced. 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 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. Criminal extortion in cyberspace is becoming ever more professional and complex and is often carried out by agile, coordinated criminal networks. Insurtech Insights is worlds largest insurtech community, connecting industry executives, entrepreneurs and investors. However, you may visit "Cookie Settings" to provide a controlled consent.