16. As a result, businesses are turning to cyber-insurance for business continuity. In 2021 alone, the Conti group of hackers the most lucrative service provider extorted or earned at least US$ 180m from victims (Chainalysis). 1. 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. 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. All industry sectors are interested in cyber insurance. [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. Regional opportunities, Latest trends and dynamics . Alarmingly, most companies are not doing enough to protect against the growing cyber threats, despite recognizing they are at risk. According to ENISA, the number of supply chain attacks quadrupled in 2021 compared with 2020. 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. Cyber insurance trends in 2023. During this same time period, the number of cyber policies increased by about 60%. The problem is thats not always the case, such as ransomware-as-a-service which are more indiscriminate attacks, he said. 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. 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. 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. Digitalisation is advancing in every area of the economy and society. Together with our clients and partners, we will continue to successfully and sustainably shape the cyber insurance market. 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. 11. Munich Re experts assume that three factors in particular will characterise the threat landscape in 2022: ransomware, supply chain and critical infrastructures. While not all cases of FFT involve compromised email accounts, it's estimated that . 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 . The implementation of adequate cyber security requires increased investment. Ransomware is becoming more common - and expensive. Not every successful attack is immediately known to or comprehensively understood by the victim. 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. The reason for this is simple: Cyber claims frequency and severity are increasing, which means carriers must improve their profitability to remain viable in this evolving segment. Axis: There was a 404% increase in ransomware demands from And it is not only in Germany that the situation is tight to critical (BSI). Critical vulnerabilities grew significantly in 2021, with an increase of approximately 20% (Tenable). 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. 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. Social engineering attacks have outpaced ransomware ones this year, fuelled by the global shift to hybrid working. In 2023, CaaS continues to pose a threat, requiring organizations to prioritize defense through employee training, threat intelligence and incident response solutions. You may be trying to access this site from a secured browser on the server. The following is the first blog post in a multi-part series on cybersecurity insurance produced by ACA Aponixs Thought Leadership Team. 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. Cyber insurance policies typically require EDR because it helps to reduce the risk of a cyber attack. This coverage typically includes your business's costs related to: Legal counsel to determine your notication and regulatory obligations. Amid changes in the threat landscape, bans on ransomware payments and other cyber-related laws could crop up across the US. 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.. This is the nature of their relationship but it is not an exclusive one, since they usually dont work alone. Over the next three to five years, we expect three major cybersecurity trends that cross-cut multiple technologies to have the biggest implications . Agents and brokers play a key role in helping clients mitigate their risk and preparing them for 2023 renewals. 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. 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. Social engineering tactics involve using manipulation to gain access to cybersecurity weaknesses. 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. It involves identifying and mitigating risks through a combination of risk management, cyber defense and adherence to relevant government protocols. 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. The insurance industrys focus lies on clear wording, an adequate level of security and comprehensive transparency on risk information. Recovery and replacement of lost or stolen data. OEM manufacturers and developers must prioritize IoT security to secure vulnerable devices. Cyber insurance is no longer deemed a nice-to-have accessory for businesses. Two new phishing tactics have successfully evaded anti-malware systems: PY#RATION and Blank Image Attacks. The cyber insurance market is hardening and becoming more mature as years pass and the market shifts and accommodates to new trends and data points. But they have gotten out of certain industry groups that are poor performers, such asK-12 school districts, or cities and municipalities.. Cyber-insurance trends for 2023. The major factors driving the market include the increasing number of sophisticated cyber-attacks amplifying the fear of financial losses . Key practices include regularly changing passwords, configuring firewalls, encrypting data and backing up data. The objective of this series is to provide clients with the highest quality insights and expertise on the changing and evolving cyber insurance marketplace. Demand for cyber insurance is currently growing more steadily than the capacity on offer. Munich Re supports government and private-sector initiatives to curb ransomware, such as the Ransomware Task Force (RTF) initiated by the US Institute for Security and Technology, and is also a member of the EU-wide No More Ransom initiative. 2022 Cyber Insurance Market Trends Report. Throughout these investigative processes, insurers are working more closely with cybersecurity professionals to better understand where cyber risks lie at an organization. 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. The range of cyber products still needs to be made better publicised and the additional benefits of those products (i.e. Several leading cyber insurance carriers documented these trends in their own studies. CEO of Codeproof, a cybersecurity firm that specializes in providing easy-to-use, modern mobile device management software to businesses. Other systemic risks however, are not insurable in the private sector. DOWNLOAD PDF. 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. Attackers rely on a mix of tried-and-tested methods as well as their own expanding repertoire of tactics and approaches. How Technology-First Insurers Solves Data Problems? Carriers have basically raised the bar for entry for cyber insurance, increasing the information security requirements for organizations to qualify, Robinson toldInsurance Business. 15. 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). Contact our team to learn more about how we can help your firm protect and grow your business. The general consensus among experts appears to be that criminals and state-motivated actors will continue to exploit the potential of these attack vectors and the criticality of supply chains. 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. And payouts are costly to insurers. Northeastern University defines multi-factor authentication as a system in which users must use two . Cybersecurity Trends in 2023. There were more than 700,000 cyberattacks on small businesses in 2020, totaling $2.8 billion in damages, according to the, . She offers any number of insights, including that those constant rate rises are likely a . 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. 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. Prioritized security measures, such as changing default passwords, prevent threats like Mirai malware. The challenges for companies are enormous. 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. beyond pure risk transfer) better explained to potential insureds. At Munich Re, the development of know-how on data analytics and tools for processing relevant internal and external data is long underway. Cybersecurity authorities in the USA, the UK and Australia are also seeing a worldwide increase in the threat to critical infrastructure. 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). The proportion of decision-makers surveyed who were still undecided about arranging cover remained unchanged at 35%. 1 concern for the third time in four years in the 2022 Travelers Risk Index. But such measures could have immense bearing on public entities, which are amongthe least prepared for cyberattacks. Companies can address and mitigate the disruptions of the future only by taking a more proactive, forward-looking stancestarting today. Cyberattacks are increasing every year as bad actors find easy targets in companies of all sizes, particularly small to medium-sized businesses. Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet. Insurtech cyber investments Where companies will be spending budgets on cyber security in 2021 $1.74bn on infrastructure spending $64.2bn on security services $545m on cloud security $10.4bn on identity access management solutions $11.6bn on security network equipment *via Feedzai Financial Crime Report Q1, 2021 Data protection According to Marsh, in September 2021, clients cyber premium rates per million in coverage increased 174% compared to the 12 months prior. Carriers are little more comfortable [with some sectors] as we see information security postures in a better place overall. It involves policies, technologies and programs aimed at reducing identity-related risks and improving business security. In order for the market to remain viable and sustainable, these are necessary changes that need to happen. Systemic risks and accumulation scenarios require a clearly defined risk appetite, in order for innovative and sustainable protection to be offered to insureds. There are too many cybersecurity jobs and too few cybersecurity professionals. Digital Life Insurance. 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. 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. Realize that businesses need cybersecurity insurance like humans need water. A Key Benefits of Innovation & Applied AI Technologies? Please enable scripts and reload this page. Analytical cookies are used to understand how visitors interact with the website. Ransomware: A malicious software that encrypts files and demands ransom for their decryption, ransomware attacks pose a significant threat in 2023. [30] The COVID-19 pandemic is likely to have a significant impact on cyber loss activity. Cyber product offerings reached significantly more decision-makers in 2022 than in the previous year (42% received an offer, compared with 34% in 2021). 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 report highlights some of the main cyber risk trends we see from an underwriting, risk consulting and claims perspective, such as the growing cost of ransomware attacks - which has been the major loss driver in recent years, the targeting of more smallersized companies by hackers, the increasing frequency and sophistication of business Use of multi-factor authentication. Further, 88% of small business owners felt their business was vulnerable to a cyberattack," according to an SBA survey. In order to ensure the sustainability of cyber insurance, applicants must provide proof of their security standards. Here are the top 20 cybersecurity trends to keep an eye on: 1. Doing nothing to prevent cyber threats leaves companies vulnerable to more than just a cyberattack or breach. In other words, companies that aren't proactive about cyber risk management will not be considered insurable going forward. By 2027, Business Insider predicts that more than 41 billion Internet of Things (IoT) devices will be . The strength of cyber insurers lies in providing excellent incident response (IR) and offering support when clients need it the most. 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. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc. Certainly, we never want our clients to be getting less coverage than they had the year before. Cyber-insurance is expected to become a $20 billion market by 2025. . 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 . 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. 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. 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. To achieve this, the industry must ensure a balance between offering customers attractive solutions and maintaining the necessary sustainability and profitability in the volatile cyber business. Cyber Insurance: To safeguard against financial losses from a data breach, organizations may obtain cyber insurance. The UK and US cyber insurance market is rife with complexity. the usage of cloud services of major providers, in its accumulation scenarios. While coverage limits fall and premiums soar, insurers are also expecting their clients to carry more risk through application of retention clauses. You also have the option to opt-out of these cookies. The imbalance of supply and demand in the cyber insurance market has resulted in soaring premium rates. The objective will be to refine risk profiles, anticipate and classify trends and learn from claims data. 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. Carriers are enhancing risk engineering and risk management capabilities. 10. 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. 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. But such measures could have immense bearing on public entities, which are among the least prepared for cyberattacks. Munich Re is one of the market and opinion leaders in the cyber insurance sector. Attackers often plan their attacks for the long term and maximise the impact by targeting supply chains and industrial or automated processes. Cybersecurity Regulations: Cybersecurity regulations are directives aimed at protecting IT systems and information from cyberattacks such as viruses, worms, phishing and unauthorized access. Cyber insurance trends to watch in 2023 Cyberattacks are becoming more sophisticated, but so are insurers. Both legislators and the insurance industry should strive increasingly on setting minimum standards for cyber resilience in companies in order to ensure sustainable improvements.