Proactive cybersecurity reduces the impact of cyberattacks and can strengthen customer trust, reputation and business growth. Certainly, we never want our clients to be getting less coverage than they had the year before. And for some, coverage will simply become unattainable. /etc/designs/munichre/mrwebsites/topics-online/current/css/fix.aem-editor.css, Munich Re: Global Cyber Risk and Insurance Survey 2022, Cybersecurity Ventures: Global Cybersecurity Spending To Exceed $1.75 Trillion From 2021-2025, European Council / Council of the European Union: Cybersecurity: how the EU tackles cyber threats, Bundesamt fr Sicherheit in der Informationstechnik (BSI) Lagebericht 2021: Bedrohungslage angespannt bis kritisch, Cybersecurity & Infrastructure Security Agency: 2021 Trends Show Increased Globalized Threat of Ransomware, Tenable: 2021 Threat Landscape Retrospective, Lloyd's Market Association: Cyber War and Cyber Operation Exclusion Clauses, European Union Agency for Cybersecurity (enisa): Threat landscape for supply chain attacks. Digitalisation is advancing in every area of the economy and society. 3. 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. 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. 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. One factor is the increase in new technologies and new devices. . 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). Companies can address and mitigate the disruptions of the future only by taking a more proactive, forward-looking stancestarting today. 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. Flock raises $38 millon for insurance that enables quantifiably safer motor fleets, CyberSmart Raises 13M to Expand Cybersecurity Solutions, Altai Ventures launches $53mn fund to invest in insurtechs. At the same time, cyber-insurance policy providers are indicating that current approaches won't be sustainable forever. New Technologies and Devices. Read on to set your policies. This is important for insurers, as they want to ensure a level of security to minimize their potential losses in the . The global cybersecurity as a service (CSaaS) market is expected to register a CAGR of 12.6% in the forecast period (2021 - 2026). 5 Trends to Ride in 2023. 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 . Social engineering tactics involve using manipulation to gain access to cybersecurity weaknesses. Amid changes in the threat landscape, bans on ransomware payments and other cyber-related laws could crop up across the US. 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. 4. Whereas in the past it was not uncommon for a midsize firm to have $10 million in coverage, that same firm today is likely only being offered $5 million or less by most carriers. The results show a further increase in the potential for integrated solutions from insurers in the market. There are multiple types of insurance policies you can get to protect your business. The percentage of insurance clients opting for cyber coverage rose. 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 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. Threat actors are increasingly resorting to supply chain security attacks with the potential for widespread impact. Cyber Insurance trends: pressures, perplexity and precaution The UK and US cyber insurance market is rife with complexity. In 2023, cyber hygiene remains vital to protect personal information from theft and corruption. They will make endorsements around the vulnerabilities scanned, and if not addressed, these could impact an organizations coverage. The proportion of decision-makers surveyed who were still undecided about arranging cover remained unchanged at 35%. 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. Cyber insurance trends to watch in 2023 Cyberattacks are becoming more sophisticated, but so are insurers. All rights reserved. February 17, 2023 10:07 AM . Keep your journey safe with more . Insurers offer protection and thereby support the productivity and capabilities of insureds. 9. Both incidents show that, big game hunting, i.e. Cyber-attacks are up by 93%.In 2020, more than 60% of companies were subject to ransomware demands. Particularly noticeable was the fact that smaller companies and government institutions often continue to be inadequately protected and are therefore more at risk overall. 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. The number of companies that already have cyber insurance increased by 20%. Cyberattacks are becoming more sophisticated, but so are insurers. 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. 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. 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. Ransomware losses have dropped in the past few months, but they have increased in severity. The cookie is used to store the user consent for the cookies in the category "Performance". Cyber insurance is basically . 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. 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. Quantum Computing: Quantum computing threatens traditional encryption methods used for secure data protection. Today, companies are more aware of their cyber risk and are looking at the insurance market to mitigate that risk. Similar to a deductible, a retention clause specifies the portion of damages policyholders will be responsible for paying before the insurance policy kicks in. Some insurers charge as little as $10 a month for $25,000 worth of coverage. Here are the top 20 cybersecurity trends to keep an eye on: 1. MSSPs prove their worth by running comprehensive assessments over organisations people, processes and technology controls, leaving no stone unturned. Volatile er insurance business can only be written sustainably and reliably for clients under these conditions. Ransomware is becoming more common - and expensive. Cyber Espionage: Cyber espionage refers to unauthorized access of sensitive data or IP for economic, competitive or political gain through cyberattacks. The cookie is used to store the user consent for the cookies in the category "Analytics". 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. Such actors are often motivated politically or otherwise to cause maximum disruption or even the destruction of processes and systems, in order to trigger economic and political instabilities. 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. This was a trend also observed by Munich Re in the past year. Since cyber-attacks are inevitable, it has become necessary to get yourself covered under a cyber insurance policy. Crucially, they can manage a continuous testing and improvement programme affordably. The cyber insurance industry has been facing challenges in recent years due to rising rates, mass cyber-attacks, and stricter policy terms. Doing nothing to prevent cyber threats leaves companies vulnerable to more than just a cyberattack or breach. Businesses must and will continue to manage the following issues: Cyber health is not the only unquantifiable factor in the cyber space risk is similarly elusive. Independent Insurance Agents & Brokers of America, Inc. Do You Know How Much Insurance Fraud Costs the Industry? The major factors driving the market include the increasing number of sophisticated cyber-attacks amplifying the fear of financial losses . For example, ransomware programs can be rented on the dark web for US$ 40 a month. 15. While firms ultimately must be prepared to pay more in premiums than they have in the past, by taking the necessary steps to mitigate risk though enhancing security controls and strengthening their cyber programs, firms will be better positioned for entering the cyber insurance marketplace in 2022 and beyond. Available to download is a free sample file of the Cybersecurity Insurance report . These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc. Munich Res current Global Cyber Risk and Insurance Study shows that the proportion of decision-makers who are seriously worried about potential cyber-attacks on their companies has increased significantly to 38%, compared with the previous years figure of 30%. [30] The COVID-19 pandemic is likely to have a significant impact on cyber loss activity. The abundance of regulatory updates and revisions in 2022 promises tighter rules and regulations in 2023. . Key trends in the current market for cyber insurance include the following: Increasing take-up. Experts predict that the increasingly agility and professionalism of cyber criminals will allow them to earn more than the global drugs trade. 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. 5 key cybersecurity trends for 2023. Likewise, with the rising cost of premiums, some firms themselves are making the decision to reduce their coverage in exchange for a less costly policy. Opinions expressed are those of the author. The problem is thats not always the case, such as ransomware-as-a-service which are more indiscriminate attacks, he said. By 2027, Business Insider predicts that more than 41 billion Internet of Things (IoT) devices will be . To secure against evolving cyber threats, businesses in 2023 must adopt advanced security technologies, continually test and update controls and educate employees on cyber risks. For insurers, a single attack can trigger losses with a great many insureds. The latest trends in ransomware prevention and protection are Zero Trust Policies, Dark Web Monitoring, and Employee Cybersecurity Training with Phishing Simulations. 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. There were more than 700,000 cyberattacks on small businesses in 2020, totaling $2.8 billion in damages, according to the Small Business Administration. 11. Compare roughly one-quarter (26%) in 2016 to one-half (47%) in 2020. Turtlefin acquired Bengaluru-based SaaS insurtech Last Decimal, Former insurance executive indicted for $2bn fraud scheme to deceive state Regulators, Insurtech Veridion secured $6mn to deepen AI comprehension of the business landscape, 2023 U.S. 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. Munich Re significantly contributes to a sustainable market, which is essential for our clients. Scenarios such as the failure of critical infrastructure (e.g. Cyber insurance is no longer deemed a nice-to-have accessory for businesses. IAM solutions enable organizations to reduce risks, comply with regulations and optimize processes. MSSPs can support insurers first and foremost by helping businesses qualify for cyber insurance more easily. The risk transfer associated with services is an essential element of risk management for companies. Cyber Insurance Trends 2022. The cyber insurance market has transitioned over the last few years: Capacity has tightened, rates continue to rise, and underwriters are looking much more closely at what risks they will write. This cookie is set by GDPR Cookie Consent plugin. Cyberattacks are increasing every year as bad actors find easy targets in companies of all sizes, particularly small to medium-sized businesses. These exclusions must be worded transparently and unambiguously. Managed security service providers (MSSPs) can do this for them, and in 2023, their role will become more pronounced. Subscribe. 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 report contains clear, reliable, and thorough Cybersecurity Insurance Market data and information that will undoubtedly help businesses to develop and boost return on investment (ROI). Use of multi-factor authentication. By contrast, in a cybersecurity context, attacks can have a snowball effect, with stolen data sold and circulating on the dark web for years. In other words, companies that aren't proactive about cyber risk management will not be considered insurable going forward. The cookie is used to store the user consent for the cookies in the category "Other. 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). Cyber-insurance pricing increased 10% from a year earlier in January, . Here's what we know about the size of the cyber insurance industry so far: Market size: According to the latest available data, the global cyber insurance market was worth $7.8 billion in 2020. At Munich Re, the development of know-how on data analytics and tools for processing relevant internal and external data is long underway. 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. While some are optional, some are required. In 2023, CaaS continues to pose a threat, requiring organizations to prioritize defense through employee training, threat intelligence and incident response solutions. This cookie is set by GDPR Cookie Consent plugin. But such measures could have immense bearing on public entities, which are amongthe least prepared for cyberattacks. She offers any number of insights, including that those constant rate rises are likely a . Munich Re budgets for particularly critical digital dependencies, e.g. Trend No. 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. 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. Cyber insurance trends in 2023. 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. And it is not only in Germany that the situation is tight to critical (BSI). Addressing security risks from unsecured IoT devices and sensors is critical to fully realize 5G's potential. January 28th is Data Privacy Day, a reminder that organizations should review their privacy obligations. If those trends continue, prices could be set to decline, said Tom Reagan, Marsh's cyber practice leader. Global Cyber Risk and Insurance Survey 2022, More action required for higher cyber resilience, Up-to-date information - directly to your mailbox. The challenges for companies are enormous. Cyber Hygiene: Cyber hygiene is the practice of keeping computer systems and devices secure. 17. 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. According to Marsh, in September 2021, clients cyber premium rates per million in coverage increased 174% compared to the 12 months prior. 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 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. Over the next three to five years, we expect three major cybersecurity trends that cross-cut multiple technologies to have the biggest implications .