Join 300,000 other insurance professionals today. Making ransom demands is not the sole motivation of attackers of critical infrastructure. Annual premiums have reached an estimated $10 billion and are expected to grow to nearly $23 billion by 2025, according to Fitch Ratings. 1. These cookies ensure basic functionalities and security features of the website, anonymously. Subscribe. Cyber Espionage: Cyber espionage refers to unauthorized access of sensitive data or IP for economic, competitive or political gain through cyberattacks. Digitalisation is advancing in every area of the economy and society. Nobody wants to pay the ransom. In particular, the looming costs of a potential breach are applying additional pressure on firms to protect themselves from the possibility of staggering losses. Use of multi-factor authentication. The increase in the number and severity of cyber attacks in 2020 and 2021 has triggered significant changes to the cyber insurance marketplace. However, trends at the end of 2022 suggest that there . Premium increases 30-150%. 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. 17. 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. Social engineering tactics involve using manipulation to gain access to cybersecurity weaknesses. 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. 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. 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. A handful of accelerating technology trends are poised to transform the very nature of insurance. Blockchain Security: Blockchain security requires risk assessment, implementation of cybersecurity frameworks, security testing and secure coding to protect against online fraud and cyberattacks, helping ensure the continued growth of blockchain technology. This cookie is set by GDPR Cookie Consent plugin. She offers any number of insights, including that those constant rate rises are likely a . Ransomware losses have dropped in the past few months, but they have increased in severity. Cyber insurance pricing in the US increased an average of 96%, year-over-year (see Figure 1), in the third quarter of 2021 as organizations faced a daily onslaught of cyberattacks. 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. 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. The problem is thats not always the case, such as ransomware-as-a-service which are more indiscriminate attacks, he said. 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. 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). CIS thought leaders identify cybersecurity trends the world might expect in 2021. The objective of this series is to provide clients with the highest quality insights and expertise on the changing and evolving cyber insurance marketplace. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. As a key part of a comprehensive cybersecurity strategy, cyber insurance helps mitigate risks and offers peace of mind. Amid changes in the threat landscape, bans on ransomware payments and other cyber-related laws could crop up across the US. Analytical cookies are used to understand how visitors interact with the website. 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. 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. As a result, businesses are turning to cyber-insurance for business continuity. 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. After several years of significant losses, carriers are limiting their cyber exposure with more. The insurance industry can and must play a role in filling this gap, particularly for smaller businesses, but they also can't do it alone. Keep your journey safe with more . . New Technologies and Devices. According to BusinessToday, cyber attacks increased by 50% in 2021 compared to the previous year. 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%. When it comes to considering how much coverage to obtain, firms should work closely with their brokers to assess their risk appetite while paying close attention to the amount of sensitive information they house. 2) Carrier appetite for cyber risk depends on the insured's cyber hygiene. and refusing to waste time on bad risks. 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. For example, Hiscox, a leading cyber carrier, showed $1.8 billion in cyber losses in 2019, which was up 50% from the prior year. According to ENISA, the number of supply chain attacks quadrupled in 2021 compared with 2020. 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. These cookies will be stored in your browser only with your consent. Also referred to as cyber risk insurance or cybersecurity insurance . Cyberattacks are increasing every year as bad actors find easy targets in companies of all sizes, particularly small to medium-sized businesses. Supply Chain Security: This is the management of potential risks in the entire supply chain, including external suppliers, logistics and technology. The failure of cloud services or a multi-client data breach, for example, are covered. 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. Further, 88% of small business owners felt their business was vulnerable to a cyberattack," according to an SBA survey. By clicking Accept All, you consent to the use of ALL the cookies. Companies with at least $200 million in cyber insurance account for a bit more than 20% of what is believed to be $5 billion in global cyber insurance premium, according to internal research. Cyber-attacks are up by 93%.In 2020, more than 60% of companies were subject to ransomware demands. 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. Demand for cyber insurance is currently growing more steadily than the capacity on offer. Prioritized security measures, such as changing default passwords, prevent threats like Mirai malware. Cybersecurity Skills Shortage: The evolving threat landscape is leading to a shortage of cybersecurity professionals, with an estimated gap of 3.5 million globally. 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. Ransomware: A malicious software that encrypts files and demands ransom for their decryption, ransomware attacks pose a significant threat in 2023. ACA Aponixoffers the following solutions thatcan help your financial institution develop, implement, and maintain the required information security program: The SEC's Division of Examinations released its annual exam priorities, which focus on compliance, fraud prevention, risk monitoring, and informing policy. Enhanced scrutiny by insurers and rising premiums are impacting the amount of coverage available to firms. Identity And Access Management (IAM): IAM security manages digital identities and controls access to data, systems and resources to ensure IT security. 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. While firms ultimately must be prepared to pay more in premiums than they have in the past, by taking the necessary steps to mitigate risk though enhancing security controls and strengthening their cyber programs, firms will be better positioned for entering the cyber insurance marketplace in 2022 and beyond. The top trends in cybersecurity are: 1. 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. DOWNLOAD PDF. India was in the top three nations that have experienced a lot of ransomware attacks. There were more than 700,000 cyberattacks on small businesses in 2020, totaling $2.8 billion in damages, according to the, . While some are optional, some are required. One factor is the increase in new technologies and new devices. Many large enterprises do what it takes to bring their level of risk down to a level they can live with and afford. The proportion of decision-makers surveyed who were still undecided about arranging cover remained unchanged at 35%. These exclusions must be worded transparently and unambiguously. The increase in remote work, cloud usage, AI and the IoT expands the attack surface, making it imperative to stay alert. We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. In Munich Res opinion, 2021 was not an exceptional year from a cyber perspective. And it is not only in Germany that the situation is tight to critical (BSI). In auto insurance, risk will shift from drivers to the artificial intelligence (AI) and software behind self-driving cars. The cyber-insurance sphere must keep up with ransomware developments. The following is the first blog post in a multi-part series on cybersecurity insurance produced by ACA Aponixs Thought Leadership Team. The third quarter increase was a 40 percentage point rise over the prior quarter, and the largest since 2015. Companies are more aware of their cyber risk and are looking at the insurance market to mitigate that risk. This is also evident from Munich Res global Cyber Risk and Insurance Survey 2022. Such a cyber resilience score then gives insurers a clear metric to assess candidates and clients by. For Robinson, the jurys still out on whether banning ransomware payments can decrease the frequency of attacks. Munich Re experts assume that three factors in particular will characterise the threat landscape in 2022: ransomware, supply chain and critical infrastructures. Both incidents show that, big game hunting, i.e. 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. The latest trends in ransomware prevention and protection are Zero Trust Policies, Dark Web Monitoring, and Employee Cybersecurity Training with Phishing Simulations. 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 usage of cloud services of major providers, in its accumulation scenarios. 4. It looks like your browser does not have JavaScript enabled. 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. Between 2016 and 2019, the costs of cyberattacks to U.S. insurers almost doubled. How IoT Technology is Reshaping Insurance Business? Organizations must stay informed and compliant with evolving regulations to secure their systems against cyber threats. . The Top Five Cybersecurity Trends In 2023 More From Forbes Feb 27, 2023,12:01am EST AI, An Amplifier Of Human Intelligence Feb 26, 2023,07:00am EST Software Ate The World, But Not Only In The. In fact, the chief executive of Zurich, one of Europe's largest . 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 . With the increased use of new technologies and the continuous growth of digital dependencies, the prospect of new threat scenarios materialising in the future is a real one. 1. In 2021 alone, the Conti group of hackers the most lucrative service provider extorted or earned at least US$ 180m from victims (Chainalysis). 3. Cyber insurance is no longer deemed a nice-to-have accessory for businesses. These types of attacks will remain prevalent in 2023, making employee education and training crucial in mitigating risk. 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. 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. 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. Internet Of Things (IoT) Security: IoT security protects cloud-connected devices from data breaches. In recent years, the Department of Homeland Security's (DHS) National Protection and Programs Directorate (NPPD) has brought together a diverse group of private and public sector stakeholders - including insurance carriers, risk managers, IT/cyber experts, critical infrastructure owners, and social scientists - to examine the current state of the 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 business reached a new peak last year and is attracting more and more criminals. SC Media, cybersecurity experts, recently reported that cyber insurance premiums were up 5% in 2019; which, in the insurance world, are minimal increases. Key trends in the current market for cyber insurance include the following: Increasing take-up. As the three previous trends discussed how certain aspects of the cybersecurity industry will continue to grow in 2023, expect the same from the cyber insurance market. The number of companies that already have cyber insurance increased by 20%. Not every successful attack is immediately known to or comprehensively understood by the victim. Social engineering tactics involve using manipulation to gain access to cybersecurity weaknesses. 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. Since cyber-attacks are inevitable, it has become necessary to get yourself covered under a cyber insurance policy. 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). IAM solutions enable organizations to reduce risks, comply with regulations and optimize processes. At Munich Re, the development of know-how on data analytics and tools for processing relevant internal and external data is long underway. As providers continue to look to shore up their risk and avoid major losses, retention policies may become a clause they increasingly lean on to distribute the risk. Doing nothing to prevent cyber threats leaves companies vulnerable to more than just a cyberattack or breach. While brokers and their clients should acknowledge that a lot of hard work has been done, cyber security is an evolving process. The cyber-attack was discovered in time, so the population of the town of Oldsmar, near Tampa, was ultimately not in danger. Contact our team to learn more about how we can help your firm protect and grow your business. Managed security service providers (MSSPs) can do this for them, and in 2023, their role will become more pronounced. Expertise from Forbes Councils members, operated under license. AXA, a French insurance firm, announced it will stop covering ransomware payments in France starting in May 2022. also, according to NetDiligence's Cyber Claims Study, between 2016 and 2020, the average cost to an insurer for a cybersecurity claim was $145,000 for . Those agencies that can differentiate themselves in the evolving cyber market stand to reap the rewards for years to come. This trend is primarily driven by the increase in the number of ransomware gangs, the success of their campaigns, and the absence of consistent security controls and data protections in the enterprise. Cybersecurity insurance claims are increasing. Prompt injection attacks on AI chatbots can reveal sensitive information about their inner workings and pose a significant threat to the security of the system. But they have gotten out of certain industry groups that are poor performers, such asK-12 school districts, or cities and municipalities.. There are too many cybersecurity jobs and too few cybersecurity professionals. In order for the market to remain viable and sustainable, these are necessary changes that need to happen. Attackers often plan their attacks for the long term and maximise the impact by targeting supply chains and industrial or automated processes. Businesses must and will continue to manage the following issues: Cyber health is not the only unquantifiable factor in the cyber space risk is similarly elusive. Cyber-insurance trends for 2023. During this same time period, the number of cyber policies increased by about 60%. And for some, coverage will simply become unattainable. 2022 Cyber Insurance Market Trends Report. For example, ransomware programs can be rented on the dark web for US$ 40 a month. 5. February 17, 2023 10:07 AM . For the majority of its relatively short life, the cyber insurance market saw rapid expansion and nimbly evolved to meet changing cyber threats. Historically, the cyber insurance marketplace had been considered soft, making it relatively easy for firms to obtain coverage at lower premiums. [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. 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. OEM manufacturers and developers must prioritize IoT security to secure vulnerable devices. While the cyber insurance industry has promising growth, it's also facing alarmingly increased loss activity. Exacting cybersecurity standards must be defined and complied with by insurers and exposed industry sectors alike. This cookie is set by GDPR Cookie Consent plugin. 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. The implementation of adequate cyber security requires increased investment. 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. Beyond preparing businesses for cyber insurance, MSSPs can also help insurers in a more direct way. Critical vulnerabilities grew significantly in 2021, with an increase of approximately 20% (Tenable). 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. However, you may visit "Cookie Settings" to provide a controlled consent. 3 Cyber Insurance Trends That Agents Need to Know for 2023. In order to ensure the sustainability of cyber insurance, applicants must provide proof of their security standards. 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. According to Cybersecurity Ventures, a ransomware attack occurred every 11 seconds in 2021. Axis: There was a 404% increase in ransomware demands from 19. This cookie is set by GDPR Cookie Consent plugin. Alarmingly, most companies are not doing enough to protect against the growing cyber threats, despite recognizing they are at risk. 7. At the same time demand for cyber insurance has been increasing, supply has been tightening, as insurers and reinsurers take a step back and reevaluate their risk appetites. targeted attacks on particularly lucrative extortion targets like pipelines, is not the only risk and that attacks on smaller and medium-sized government service providers or companies are also possible. 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 2023, cyber hygiene remains vital to protect personal information from theft and corruption. 12. 2. 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. 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. Companies can address and mitigate the disruptions of the future only by taking a more proactive, forward-looking stancestarting today. Insurers will be focusing even more strongly on the targeted analysis and use of data.