At a time when we don’t have enough things to think about with the cost-of-living crisis, fuel prices, and growing energy costs, businesses are seeing a huge rise in business insurance premiums and finding the cover is being cut, especially for Technology and Cyber cover. Cyber insurance has been around for over 20 years. These insurance policies cover common cyber-related risks and losses, most are associated with data breaches and ransomware attacks that result in loss of business or disruption.
Currently, what is happening today in the cyber insurance market is comparable to what happens to property insurance prices in parts of the world that experience expected or unexpected major hurricanes or devastating floods.
The Big question is, what is driving this significant rise in cyber insurance PREMIUMS?
Traditional network architectures are evolving with the continued adoption of both the cloud and a hybrid work model. In many cases, the speed of this evolution is outpacing essential security practices and deployments which can lead to misconfigurations or vulnerabilities.
To make things worse, the introduction of ransomware-as-a-service has allowed even novice cyber attackers to execute ransomware attacks quickly and effectively.
WORK-FROM-HOME EXPOSURE
Inside threats and endpoint security procedures are harder to enforce in today's work-from-home environment. Depending on the user's work environment, it can be nearly impossible to safeguard from a home office, and training can be difficult to administer in a remote work model. This means there is a higher risk for remote workers than for traditional office settings.
Growing demand for cyber insurance
It's reported that the average ransomware demand has increased to $5.3 million in the first half of 2021, up from $847,000 in 2020. That's an increase of 518%. This is due to the increase in cyber-attacks, and the panic attempts to reduce the ransom. This has led to a common ransom tactic of demanding an exceptionally high sum with the expectation to settle for less.
Higher PAYOUTS
While most firms are tight-lipped about final payments, escalating demands often generate higher payouts. In the first part of 2021, criminals saw a significant increase in their take-home pay, with ransom payments increasing by 86% to an average of $570,000, up from $312,000 in 2020.
As the payout amounts continue to grow, this entices future attackers and results in many insurance companies now operating under the expectation that a ransomware event will occur with their policyholders. This creates an unfortunate cycle of more payouts to ransomware operators and increased premiums to compensate.
WHAT CAN YOUR ORGANISATION DO TO PROTECT ITSELF?
Get Proactive NOW!
If you have a cyber insurance policy, don't wait until you receive the standard one-month's notice regarding a premium increase from your provider. Maintain a strong relationship with your insurance broker and reach out to them as early as possible. This will allow you to ask many questions and understand what kind of premium bump you may face in the upcoming renewal. If nothing else, being proactive will allow you time to budget for the increase or increase your cyber security posture improvements quicker.
Implement Foundational Security Measures
Many insurance providers are opting to drop coverage of their customers if they have not met certain base security requirements. This can include multi-factor authentication (MFA), User endpoint monitoring, and 24x7 continuous monitoring.
deploying additional security controls can possibly help lower your cyber risk profile. The more you invest in your cyber security posture, the lower your premiums could be. make sure you start the implementation or improvements as soon as possible.
Look Around at THE Options
Establish a partnership with an insurance broker who understands the security measures you have in place. They might uncover options to keep insurance premiums manageable or increase coverage should the need arise.
Also, comparing policies can be a complex undertaking. Make sure to select a broker who expresses a willingness to help you compare policies. Bear in mind that the underwriting process varies depending on the insurance provider, with many providers making it extremely rigorous and extremely time-consuming.
Security Partners
While insurance companies and brokers can provide access to cyber insurance policies, don't forget to speak with us and our partners who have experience in this domain.
Our leading cyber security partner is the Arctic Wolf, who are a market leader in cyber security operations, Arctic Wolf® maintains deep relationships within the insurance community, including partnerships with insurers who can offer competitive policies and rates. The Arctic Wolf Concierge Security® approach ensures you have experts available 24x7 who understand your environment and can work with you on the security best practices that many insurance carriers required