These types of attacks will remain prevalent in 2023, making employee education and training crucial in mitigating risk. For Robinson, the jurys still out on whether banning ransomware payments can decrease the frequency of attacks. 6. Key trends in the current market for cyber insurance include the following: Increasing take-up. Carriers have basically raised the bar for entry for cyber insurance, increasing the information security requirements for organizations to qualify. Ransomware: A malicious software that encrypts files and demands ransom for their decryption, ransomware attacks pose a significant threat in 2023. In 2021, cyberattacks on all sizes of companies were up 15%, according to a report by. Cyberattacks are increasing every year as bad actors find easy targets in companies of all sizes, particularly small to medium-sized businesses. 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. As we look ahead, these are the top five trends we anticipate seeing in 2022. Internet Of Things (IoT) Security: IoT security protects cloud-connected devices from data breaches. In addition, EDR can provide evidence that an organization has taken appropriate measures to protect its environment and data. 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%. In Munich Res opinion, 2021 was not an exceptional year from a cyber perspective. In September 2021, Marsh reported 23% of its clients experienced either a voluntary or involuntary decline in coverage. SC Media, cybersecurity experts, recently reported that cyber insurance premiums were up 5% in 2019; which, in the insurance world, are minimal increases. 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. 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. Please turn on JavaScript and try again. CEO of Codeproof, a cybersecurity firm that specializes in providing easy-to-use, modern mobile device management software to businesses. A Key Benefits of Innovation & Applied AI Technologies? The cyber-attack was discovered in time, so the population of the town of Oldsmar, near Tampa, was ultimately not in danger. 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. The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". Insurers offer protection and thereby support the productivity and capabilities of insureds. Over the next three to five years, we expect three major cybersecurity trends that cross-cut multiple technologies to have the biggest implications . 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. But such measures could have immense bearing on public entities, which are amongthe least prepared for cyberattacks. On the other hand, insurers can only do so much to help businesses get their house in order. 20. And for some, coverage will simply become unattainable. At Munich Re, the development of know-how on data analytics and tools for processing relevant internal and external data is long underway. In 2023, CaaS continues to pose a threat, requiring organizations to prioritize defense through employee training, threat intelligence and incident response solutions. 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. CFA Institute does not endorse, promote or warrant the accuracy or quality of ACA Group. While were seeing pricing easing up, were also seeing more industry specific underwriting, Robinson noted. The third quarter increase was a 40 percentage point rise over the prior quarter, and the largest since 2015. Munich Re is one of the market and opinion leaders in the cyber insurance sector. You also have the option to opt-out of these cookies. 1. Nobody wants to pay the ransom. 14. Similarly, the number of insurers offering cyber insurance increased by about 35% between 2016 and 2019. Looking to 2022 and beyond, it is forecasted firms will continue to experience higher premiums as insurers respond to evolving cyber threats. 1 concern for the third time in four years in the 2022 Travelers Risk Index. Now, three quarters into 2022, the market is clearly showing signs of improvement: New capacity and insurers continue to enter the market. Cybersecurity Regulations: Cybersecurity regulations are directives aimed at protecting IT systems and information from cyberattacks such as viruses, worms, phishing and unauthorized access. The cookie is used to store the user consent for the cookies in the category "Performance". 1. Here are the top 20 cybersecurity trends to keep an eye on: 1. Employee awareness and reporting of anomalies to IT administrators can greatly reduce the risk of a successful attack. 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. Communication with clients will also be key so that they have a change to act on those vulnerabilities before their cyber insurance application and get the appropriate level of cover. 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. Similar to a deductible, a retention clause specifies the portion of damages policyholders will be responsible for paying before the insurance policy kicks in. 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. GIPS is a registered trademark owned by CFA Institute. The cybersecurity picture continues to evolve, and it's too much for agents to keep up withthat's why they should partner with organizations that can help their clients identify and mitigate network vulnerabilities, implement cybersecurity best practices and assist with monitoring for dangerous activity. Exacting cybersecurity standards must be defined and complied with by insurers and exposed industry sectors alike. Dont worry about the news anymore, through our newsletter youll receive weekly access to what is happening. Realize that businesses need cybersecurity insurance like humans need water. Also, if they are not protecting company assets, executives and owners will also face increased litigation. By contrast, in a cybersecurity context, attacks can have a snowball effect, with stolen data sold and circulating on the dark web for years. Today, companies are more aware of their cyber risk and are looking at the insurance market to mitigate that risk. This is why, for example, insurers are treading with trepidation around building reputational damage into business and cyber packages. Alex Smith, Intermedia Cloud Communications. Cyber-insurance trends for 2023. 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. By engaging early in the planning and application process, firms will be able to better identify existing gaps in their security and work to remedy them to increase their chances of securing a policy with more attractive rates and coverage. As a result, it has not been uncommon for firms to experience a 100-300% increase in premiums. telecommunications or the power supply), as well as a possible cyber war, exceed the limits of insurability and are consequently excluded. 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. In current data compliance dominated economies, the legal complexities . With respect to the scope of cover under policies, respondents would like coverage to extend to data recovery services in an emergency, a 24-hour hotline, legal advice and forensic services. This cookie is set by GDPR Cookie Consent plugin. MSSPs prove their worth by running comprehensive assessments over organisations people, processes and technology controls, leaving no stone unturned. 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. The sustainability of the cyber insurance market can be further improved with better resilience and innovative coverage of residual risks. 2017-2023 ACA Group. This website uses cookies to improve your experience while you navigate through the website. The top trends in cybersecurity are: 1. 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. 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. 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. 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. In particular the loss-exposed sectors require proper risk coverage: healthcare, services, retail, the manufacturing sector, government institutions including the education sector, as well as financial services providers. The challenges for companies are enormous. Digitalisation is advancing in every area of the economy and society. Our offering increases our insureds resilience and improves the protection of digital business models. Some decreases in the 5% range on more favorable . Such a cyber resilience score then gives insurers a clear metric to assess candidates and clients by. To continue playing a leading role in shaping the market, Munich Re is pursuing a learning strategy and continuing to invest in dedicated cyber teams and expertise. However, there is still a lot more to be done to achieve increased cybersecurity and progress has been slow up to now. 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. 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. Cyber insurance may seem like uncharted territory, as threats are hard to anticipate and risk remains elevated. 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. The cyber insurance market has never been more confusing. 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.. 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. 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. 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. 3 Cyber Insurance Trends That Agents Need to Know for 2023. 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). 4. This shortage will continue to be a concern in 2023, forcing companies to invest in training and retaining talent or outsourcing cybersecurity tasks. In order for the market to remain viable and sustainable, these are necessary changes that need to happen. Premiums flat to 20%. 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. Criminal extortion in cyberspace is becoming ever more professional and complex and is often carried out by agile, coordinated criminal networks. In view of increased vulnerabilities, it is crucial for companies and organisations to have a clear understanding of the threat landscape and ones own weaknesses. 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. This development affects a multitude of sectors, including the insurance sphere. Fraudulent Funds Transfer, or FFT, is now the leading cause of cyber-insurance claims, according to Corvus Insurance. 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. While often retention policies are being demanded by the insurers, some policy applicants are willingly taking on higher retention rates in the hopes of minimizing their premium hikes. A complication for cyber-insurance: FFT on the rise. 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. 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.. 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. How IoT Technology is Reshaping Insurance Business? 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. This cookie is set by GDPR Cookie Consent plugin. Cyber Insurance Trends 2022. 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. 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. All rights reserved. The results show a further increase in the potential for integrated solutions from insurers in the market. The number of companies that already have cyber insurance increased by 20%. 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. Prominent losses feature in the news cycle and continue to raise awareness of the threat of cyber attacks. Annual premiums have reached an estimated $10 billion and are expected to grow to nearly $23 billion by 2025, according to Fitch Ratings. At the same time the vast majority of C-Level respondents confirm that adequate cyber security is still an issue within their companies. How Technology-First Insurers Solves Data Problems? and refusing to waste time on bad risks. For the majority of its relatively short life, the cyber insurance market saw rapid expansion and nimbly evolved to meet changing cyber threats. Cybersecurity, Technology Risk, and Privacy, Mutual Funds, ETFs, and Other Investment Companies, Private Equity Sponsors and Portfolio Companies, take the 2022 Aponix Cyber Insurance survey here, The National Association of Insurance Commissioners, stop covering ransomware payments in France, Business Continuity Planning, Cyber Incident Response Planning, and Business Impact Analysis, Payment and Fraud Risk Assessment Services, Penetration Testing and Vulnerability Assessments, Newly Discovered Phishing Campaigns Evade Anti-Malware Systems. Since cyber-attacks are inevitable, it has become necessary to get yourself covered under a cyber insurance policy. Northeastern University defines multi-factor authentication as a system in which users must use two . 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. Munich Re budgets for particularly critical digital dependencies, e.g. [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. 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. The cyber insurance market will continue to respond to a changing threat landscape, but also will be shaped by business, economic and regulatory forces. Cyber Insurance: Top Five Trends for 2022. In other words, companies that aren't proactive about cyber risk management will not be considered insurable going forward. There were more than 700,000 cyberattacks on small businesses in 2020, totaling $2.8 billion in damages, according to the Small Business Administration. After several years of significant losses, carriers are limiting their cyber exposure with more. The cyber-insurance sphere must keep up with ransomware developments. In 2021 alone, the Conti group of hackers the most lucrative service provider extorted or earned at least US$ 180m from victims (Chainalysis). 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. Analytical cookies are used to understand how visitors interact with the website. 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. Cyber-Physical Systems (CPS) Security: Cyber-physical systems, including transportation, energy and critical infrastructure, pose security challenges as they become interconnected and autonomous. While coverage limits fall and premiums soar, insurers are also expecting their clients to carry more risk through application of retention clauses. 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 $2.7 billion." RPS data found that fraudulent payments and social engineering fraud among small to medium-sized enterprises made up more than 50% of claims between January and August 2022. Global premiums for cyber insurance are predicted to grow from US$ 9.2 billion in 2022 to US$22 billion by 2025, with some estimates suggesting they could reach over US$ 60 billion by 2029. 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. These factors have resulted in an overall downward trend in coverage limits. In Section 4.1.1, OCE describes the core challenges with the current state of the cyber , and the number of material breaches rose by nearly 25%. First-party cyber coverage protects your data, including employee and customer information. 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. 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. 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. Throughout these investigative processes, insurers are working more closely with cybersecurity professionals to better understand where cyber risks lie at an organization. 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.. Satellites, drones, and real-time data sets will give insurers unprecedented visibility into the risk around facilities . Compared with the previous year, thesurvey shows that cyber insurance is becoming increasingly popular. 19. The Global Cyber Security Insurance market is anticipated to rise at a considerable rate during the forecast period, between 2023 and 2029. . 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. Contact our team to learn more about how we can help your firm protect and grow your business. According to ENISA, the number of supply chain attacks quadrupled in 2021 compared with 2020. A Guide to Cyber Insurance for 2022. 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. DOWNLOAD PDF. As a result, insurers are focusing more intensely on risk selection by asking more questions and requiring more documentation to evaluate firms cyber programs. There were more than 700,000 cyberattacks on small businesses in 2020, totaling $2.8 billion in damages, according to the, . It reveals what's driving the increase in premiums and how the market will evolve in response to growing threats such as ransomware. Axis: There was a 404% increase in ransomware demands from Both legislators and the insurance industry should strive increasingly on setting minimum standards for cyber resilience in companies in order to ensure sustainable improvements. One out of four attacks have been faced by India in 2021. Also referred to as cyber risk insurance or cybersecurity insurance . Amid changes in the threat landscape, bans on ransomware payments and other cyber-related laws could crop up across the US. The reasons for the rise in cyberattacksand the focus on protecting against themis multifold, Noubir says. Insurtech Insights is worlds largest insurtech community, connecting industry executives, entrepreneurs and investors. Data from a global insurance broker indicate its clients' take-up rate (proportion of existing clients electing coverage) for cyber insurance rose from 26 percent in 2016 to 47 percent in 2020 (see figure). For example, Hiscox, a leading cyber carrier, showed $1.8 billion in cyber losses in 2019, which was up 50% from the prior year. In other industries, reputational damage tends to occur in the aftermath of one-off events such as natural disasters and can often be predicted to some extent (see Global Cyber Crime, Fraud & Ransomware Survey). Find out more in ESET's Cybersecurity Trends 2023: Securing Our Hybrid Lives report. Prominent losses feature in the news cycle and continue to raise awareness of the threat of cyber attacks. Key practices include regularly changing passwords, configuring firewalls, encrypting data and backing up data. In 2023, its importance will only increase, as coverage becomes a seal of approval, indicating the organisations strong cyber security posture to customers, partners and peers. Cyber insurance trends to watch in 2023 Cyberattacks are becoming more sophisticated, but so are insurers. The percentage of insurance clients opting for cyber coverage rose. Cyber Hygiene: Cyber hygiene is the practice of keeping computer systems and devices secure. The major factors driving the market include the increasing number of sophisticated cyber-attacks amplifying the fear of financial losses . Multi-factor authentication (MFA) is becoming a key requisite of many insurers alongside other controls such as the presence of an end point detection and response solution, secured and encrypted backups, privileged access management, business continuity and incident response planning, and cybersecurity awareness training to name a few. However, these policies were never priced to account for cyber warfare thats accompanying an armed conflict, or major cloud breaches that could simultaneously affect millions of cyber policyholders at the same time, Robinson said. Munich Re sees cyber premiums worldwide standing at US$ 9.2bn (beginning of 2022) and estimates that they will reach a value of approximately US$ 22bn by 2025. Certain classes exceeding 400%. . 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. We also use third-party cookies that help us analyze and understand how you use this website. 17. These cookies ensure basic functionalities and security features of the website, anonymously. Prioritized security measures, such as changing default passwords, prevent threats like Mirai malware. 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. 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. 15. Beyond preparing businesses for cyber insurance, MSSPs can also help insurers in a more direct way. We continue to see ransomware attacks as the number one cyber threat. 3. 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. ; Half of Marsh's U.S. clients purchased standalone cyber insurance policies in 2021, almost double the 26% of clients in 2016. Global Cyber Risk and Insurance Survey 2022, More action required for higher cyber resilience, Up-to-date information - directly to your mailbox. Organizations are improving their cyber hygiene. Ransomware business reached a new peak last year and is attracting more and more criminals. The cookie is used to store the user consent for the cookies in the category "Analytics". 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.