The challenges for companies are enormous. Since cyber-attacks are inevitable, it has become necessary to get yourself covered under a cyber insurance policy. CFA Institute does not endorse, promote or warrant the accuracy or quality of ACA Group. There are too many cybersecurity jobs and too few cybersecurity professionals. Agents and brokers play a key role in helping clients mitigate their risk and preparing them for 2023 renewals. 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. Systemic risks and accumulation scenarios require a clearly defined risk appetite, in order for innovative and sustainable protection to be offered to insureds. The report focuses on Cybersecurity Insurance Market size, share, growth status, future trends, volume, and key market dynamics. 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. The Cybersecurity Insurance research report provides a comprehensive outlook of the market size and an industry growth forecast for 2023 to 2028. How IoT Technology is Reshaping Insurance Business? In our own research on personal cyber insurance, we found that people weren't aware of the real costs of . 5. 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. Ransomware: A malicious software that encrypts files and demands ransom for their decryption, ransomware attacks pose a significant threat in 2023. The goal in a sustainable market is to establish solutions for cyber risks as a long-term insurance offering, increase insureds resilience and thereby promote the protection of digital economic models. For insurers, a single attack can trigger losses with a great many insureds. Compare roughly one-quarter (26%) in 2016 to one-half (47%) in 2020. Supply Chain Security: This is the management of potential risks in the entire supply chain, including external suppliers, logistics and technology. AXA, a French insurance firm, announced it will stop covering ransomware payments in France starting in May 2022. India was in the top three nations that have experienced a lot of ransomware attacks. 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. The sustainability of the cyber insurance market can be further improved with better resilience and innovative coverage of residual risks. The total global economic loss due to cyber-crime is difficult to estimate. Ransomware losses have dropped in the past few months, but they have increased in severity. 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. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc. Technical cybersecurity solutions for the insurance industry must focus on access controls, data behavior, the encryption of large data volumes, and the prevention of data leaks. 5 Trends to Ride in 2023. 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. Companies are more aware of their cyber risk and are looking at the insurance market to mitigate that risk. 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. 4. While coverage limits fall and premiums soar, insurers are also expecting their clients to carry more risk through application of retention clauses. 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. ; Half of Marsh's U.S. clients purchased standalone cyber insurance policies in 2021, almost double the 26% of clients in 2016. Insurtech Insights is worlds largest insurtech community, connecting industry executives, entrepreneurs and investors. 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. DOWNLOAD PDF. Making ransom demands is not the sole motivation of attackers of critical infrastructure. Internet of Things in Insurance. Trend No. As to preventive services included in the policy, services in the area of network security, backup and password management were mentioned as priorities. 2. 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. By contrast, in a cybersecurity context, attacks can have a snowball effect, with stolen data sold and circulating on the dark web for years. 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. According to Cybersecurity Ventures, a ransomware attack occurred every 11 seconds in 2021. Doing nothing to prevent cyber threats leaves companies vulnerable to more than just a cyberattack or breach. We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. 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. 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. All of these players will make use of expertise that has already been developed in the insurance market. The top trends in cybersecurity are: 1. Some insurers charge as little as $10 a month for $25,000 worth of coverage. In general, though, you can expect to pay $25 to $100 per month for cyber insurance, depending on how much coverage you want and which deductible you choose. Our offering increases our insureds resilience and improves the protection of digital business models. The abundance of regulatory updates and revisions in 2022 promises tighter rules and regulations in 2023. . In Munich Re's opinion, 2021 was not an exceptional year from a cyber perspective. Cyber insurance is fundamental for the successful digitalisation of the economy. You may be trying to access this site from a secured browser on the server. Premiums flat to 20%. In order for the market to remain viable and sustainable, these are necessary changes that need to happen. Similar to a deductible, a retention clause specifies the portion of damages policyholders will be responsible for paying before the insurance policy kicks in. Fraudulent Funds Transfer, or FFT, is now the leading cause of cyber-insurance claims, according to Corvus Insurance. Those agencies that can differentiate themselves in the evolving cyber market stand to reap the rewards for years to come. In 2021 alone, the Conti group of hackers the most lucrative service provider extorted or earned at least US$ 180m from victims (Chainalysis). 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. 17. However, there is still a lot more to be done to achieve increased cybersecurity and progress has been slow up to now. As a result, businesses are turning to cyber-insurance for business continuity. 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. Both legislators and the insurance industry should strive increasingly on setting minimum standards for cyber resilience in companies in order to ensure sustainable improvements. This cookie is set by GDPR Cookie Consent plugin. Munich Re budgets for particularly critical digital dependencies, e.g. It will remain a major threat in 2023. CIS thought leaders identify cybersecurity trends the world might expect in 2021. Beyond preparing businesses for cyber insurance, MSSPs can also help insurers in a more direct way. While were seeing pricing easing up, were also seeing more industry specific underwriting, Robinson noted. Carriers are enhancing risk engineering and risk management capabilities. In other words, companies that aren't proactive about cyber risk management will not be considered insurable going forward. 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. 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. 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. Geopolitics And Hybrid Warfare: The reality of geopolitics and hybrid warfare has been redefined since the Russian conflict. Its a positive sign shining light into a tumultuous market, which in 2023 will continue to face capacity challenges driven by increased demand, two-plus years of significant premium increases, more judicious limits deployment, and the exit of some players from the market. The cyber insurance industry has been facing challenges in recent years due to rising rates, mass cyber-attacks, and stricter policy terms. Further, 88% of small business owners felt their business was vulnerable to a cyberattack," according to an SBA survey. Such a cyber resilience score then gives insurers a clear metric to assess candidates and clients by. The risk transfer associated with services is an essential element of risk management for companies. The 2021 attack on Kaseya, a software service provider for remote monitoring solutions, resulted in malicious code with ransomware being distributed to approximately 1,500 clients. 3) Clients expect support, knowledge and resources. New Technologies and Devices. This cookie is set by GDPR Cookie Consent plugin. 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. 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. While AXAs decision only applies to France currently, it has the potential to open the door for other insurers to follow suit in the future. There were more than 700,000 cyberattacks on small businesses in 2020, totaling $2.8 billion in damages, according to the, . However, when properly secured and monitored, AI and ML can also be used to improve cybersecurity defenses and mitigate potential threats. And for some, coverage will simply become unattainable. One way in which insurers are responding is by establishing tighter security control requirements of applicants. 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. 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. Ransomware business reached a new peak last year and is attracting more and more criminals. Join 300,000 other insurance professionals today. While brokers and their clients should acknowledge that a lot of hard work has been done, cyber security is an evolving process. Attackers often plan their attacks for the long term and maximise the impact by targeting supply chains and industrial or automated processes. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. These cookies ensure basic functionalities and security features of the website, anonymously. Contact our team to learn more about how we can help your firm protect and grow your business. Cyber insurance is basically . SC Media, cybersecurity experts, recently reported that cyber insurance premiums were up 5% in 2019; which, in the insurance world, are minimal increases. Carriers have basically raised the bar for entry for cyber insurance, increasing the information security requirements for organizations to qualify. Other systemic risks however, are not insurable in the private sector. 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. Remote Workforce Security: To ensure secure remote and hybrid work, organizations should implement strong security protocols such. After several years of significant losses, carriers are limiting their cyber exposure with more. With the increase in the number of cyber incidents and claims filed, the industry has become less profitable. Cyber-insurance is expected to become a $20 billion market by 2025. Artificial Intelligence (AI) And Machine Learning (ML): AI and ML could potentially pose a cyber threat, as they can be used by attackers to automate and scale their malicious activities. Cyberattacks are increasing every year as bad actors find easy targets in companies of all sizes, particularly small to medium-sized businesses. Cyber Insurance: To safeguard against financial losses from a data breach, organizations may obtain cyber insurance. 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. 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. 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.. The Global Cyber Security Insurance market is anticipated to rise at a considerable rate during the forecast period, between 2023 and 2029. . 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. Annual premiums have reached an estimated $10 billion and are expected to grow to nearly $23 billion by 2025, according to Fitch Ratings. 7. 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. 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). And it is not only in Germany that the situation is tight to critical (BSI). Many large enterprises do what it takes to bring their level of risk down to a level they can live with and afford. 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. By 2027, Business Insider predicts that more than 41 billion Internet of Things (IoT) devices will be . 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. Cyber insurance buyers enjoyed expanding coverage terms, plentiful capacity and flat to falling rates in a highly competitive insurance marketplace. They will make endorsements around the vulnerabilities scanned, and if not addressed, these could impact an organizations coverage. 9. It is virtually impossible to quantify the risk. Threat actors are increasingly resorting to supply chain security attacks with the potential for widespread impact. 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%. As a result, it has not been uncommon for firms to experience a 100-300% increase in premiums. In view of current political conflicts, this trend is not expected to wane this year. The early approach whereby attackers specialised decryption and later on exfiltration of stolen data is evolving to include multiple extortion schemes. 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. Regional opportunities, Latest trends and dynamics . There are multiple types of insurance policies you can get to protect your business. 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%. Cyber product offerings reached significantly more decision-makers in 2022 than in the previous year (42% received an offer, compared with 34% in 2021). 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. , and the number of material breaches rose by nearly 25%. 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. In general, the cyber market as a whole is expected to continue its growth into 2020. The global cybersecurity as a service (CSaaS) market is expected to register a CAGR of 12.6% in the forecast period (2021 - 2026). Cyber insurance buyers enjoyed expanding coverage terms, plentiful capacity and flat to falling rates in a highly competitive marketplace. Over the next three to five years, we expect three major cybersecurity trends that cross-cut multiple technologies to have the biggest implications . The public sector, including education, also faces fewer options for risk transfer after the pull-out of several carriers from the space due to skyrocketing claims (see TOP 15 U.S. Cyber Insurance Companies). The number of companies that already have cyber insurance increased by 20%. Two new phishing tactics have successfully evaded anti-malware systems: PY#RATION and Blank Image Attacks. As a result, insurers are focusing more intensely on risk selection by asking more questions and requiring more documentation to evaluate firms cyber programs. Cybersecurity Ventures forecasts that with further annual rate increases of 15% the loss will amount to roughly US$ 10.5tn in 2025. 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. The results show a further increase in the potential for integrated solutions from insurers in the market. Crucially, they can manage a continuous testing and improvement programme affordably. In 2023, CaaS continues to pose a threat, requiring organizations to prioritize defense through employee training, threat intelligence and incident response solutions. Such issues will persist moving into 2023, but MSSPs can offer the resources required to give insurers greater peace of mind, bring more clarity and speed into operations, and help businesses qualify for the coverage of their choice faster. 20. Read on to set your policies. 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. Prioritized security measures, such as changing default passwords, prevent threats like Mirai malware. 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. They rose by 89% in the fourth quarter of 2021, according to Risk Strategies State of the Market 2022 Report. [30] The COVID-19 pandemic is likely to have a significant impact on cyber loss activity. 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. For the majority of its relatively short life, the cyber insurance market saw rapid expansion and nimbly evolved to meet changing cyber threats. A Guide to Cyber Insurance for 2022. Enhanced scrutiny by insurers and rising premiums are impacting the amount of coverage available to firms. Some criminal perpetrators also cooperate with state actors. The cyber-insurance sphere must keep up with ransomware developments. Specifically, if firms are determined to be of high risk, insurers are less likely to offer them a higher coverage limit or coverage altogether.