Plans are harder to get, premiums are up, and the industry is changing
Nearly every aspect of our daily lives is digital. From email servers to healthcare portals, and from streaming services to mortgage applications, the digital landscape is moneyed, crowded, and dangerous.
Headlines continue to be dominated by news about scams, phishing attempts, data breaches, and massive ransomware attacks. In response, over the past years, cyber insurance has become a necessity for many businesses. Companies across all industries are looking to protect themselves legally and financially in the case of a cyberattack.
Mike Wilson points out in Forbes that the growing demand, coupled with increasing payouts, is driving the cyber insurance industry to rethink how and why they provide insurance packages, including cyber assessments and responsive premiums.
These changes mean cyber insurance is becoming more difficult to obtain if your company hasn’t taken extensive action to bolster defenses already. Companies who do already have cyber insurance may be finding they can’t simply renew their plans; both requirements and premiums are increasing. For context, direct-written premiums for cyber insurance collected by U.S. insurance carriers in 2021 grew by 92% year over year.
What does Cyber Insurance do?
Cyber insurance policies are multifaceted. They help protect organizations legally and financially in case of a breach or attack. For example, a company might seek liability coverage over a breach leading to the leaking of personal or sensitive client information. Or an organization might seek a financial bail-out in the case of a ransomware attack where they have to pay to retrieve stolen data.
What’s changing, practically speaking?
It’s a challenging time for businesses. A recent Forrester report estimated that a data breach costs the average organization $2.4 million. However, only 55% of survey respondents currently have cyber insurance, and as it becomes more obligatory, the process is becoming more complex.
As companies adjust to a) the need for strong, full coverage cyber insurance policies, b) more expensive premiums and c) increasing cybersecurity requirements to qualify for a plan, Wilson is right: the entire industry is in flux.