7. Carriers are enhancing risk engineering and risk management capabilities. Alongside lower coverage limits, some insurers are reconsidering coverage altogether for certain cyber incidents such as ransomware. Munich Re supports insureds and companies in developing their own resilience and responsiveness and thereby enables them to satisfy the preconditions for access to the cyber insurance market. 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. Social engineering attackshave outpaced ransomware ones this year, fuelled by the global shift to hybrid working. 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. Scenarios such as the failure of critical infrastructure (e.g. 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. Doing nothing to prevent cyber threats leaves companies vulnerable to more than just a cyberattack or breach. February 17, 2023 10:07 AM . 8. Munich Re significantly contributes to a sustainable market, which is essential for our clients. Managed security service providers (MSSPs) can do this for them, and in 2023, their role will become more pronounced. Ransomware and cyber-attacks on both supply chains and critical infrastructures pose a greater threat than ever to companies and society. Premium increases 30-150%. Carriers have basically raised the bar for entry for cyber insurance, increasing the information security requirements for organizations to qualify. Keep your journey safe with more . By engaging early in the planning and application process, firms will be able to better identify existing gaps in their security and work to remedy them to increase their chances of securing a policy with more attractive rates and coverage. Social engineering tactics involve using manipulation to gain access to cybersecurity weaknesses. Opinions expressed are those of the author. While coverage limits fall and premiums soar, insurers are also expecting their clients to carry more risk through application of retention clauses. 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. Ransomware is becoming more common - and expensive. Here are the top 20 cybersecurity trends to keep an eye on: 1. In addition, EDR can provide evidence that an organization has taken appropriate measures to protect its environment and data. Cyber insurance policies typically require EDR because it helps to reduce the risk of a cyber attack. At the same time, only 50% reported being fully prepared" against such an incident, a Provident Bank survey found. During this same time period, the number of cyber policies increased by about 60%. 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. Trend No. In September 2021, Marsh reported 23% of its clients experienced either a voluntary or involuntary decline in coverage. Contact our team to learn more about how we can help your firm protect and grow your business. Cyber product offerings reached significantly more decision-makers in 2022 than in the previous year (42% received an offer, compared with 34% in 2021). Fraudulent Funds Transfer (FFT) is a type of cyber-attack where criminals use social engineering tactics to trick Accounts Payable (AP) staff into transferring funds to illegitimate bank accounts.. FFT is closely linked with Business Email Compromise (BEC). This is why, for example, insurers are treading with trepidation around building reputational damage into business and cyber packages. On the insurance side, they will invest more in tools for underwriting cyber risk, portfolio management and high-end cybersecurity risk mitigation services to their insureds. Cyber-insurance pricing increased 10% from a year earlier in January, . Cyber insurance may seem like uncharted territory, as threats are hard to anticipate and risk remains elevated. Since cyber-attacks are inevitable, it has become necessary to get yourself covered under a cyber insurance policy. Cyber insurance buyers enjoyed expanding coverage terms, plentiful capacity and flat to falling rates in a highly competitive insurance marketplace. Demand for cyber insurance is currently growing more steadily than the capacity on offer. This is important for insurers, as they want to ensure a level of security to minimize their potential losses in the . Crucially, they can manage a continuous testing and improvement programme affordably. Please enable scripts and reload this page. Ransomware losses have dropped in the past few months, but they have increased in severity. While were seeing pricing easing up, were also seeing more industry specific underwriting, Robinson noted. The Top Five Cybersecurity Trends In 2023 More From Forbes Feb 27, 2023,12:01am EST AI, An Amplifier Of Human Intelligence Feb 26, 2023,07:00am EST Software Ate The World, But Not Only In The. Please turn on JavaScript and try again. It involves policies, technologies and programs aimed at reducing identity-related risks and improving business security. For the majority of its relatively short life, the cyber insurance market saw rapid expansion and nimbly evolved to meet changing cyber threats. Ransomware losses have dropped in the past few months, but they have increased in severity. According to BusinessToday, cyber attacks increased by 50% in 2021 compared to the previous year. Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors. The increase in the number and severity of cyber attacks in 2020 and 2021 has triggered significant changes to the cyber insurance marketplace. 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 2021 alone, the Conti group of hackers the most lucrative service provider extorted or earned at least US$ 180m from victims (Chainalysis). Your budget should include obtaining the required insurance policies according to state and local laws. Future growth: Forecasts suggest that cyber insurance will grow into a $20 billion industry by 2025. There were more than 700,000 cyberattacks on small businesses in 2020, totaling $2.8 billion in damages, according to the Small Business Administration. For insurers, a single attack can trigger losses with a great many insureds. MSSPs prove their worth by running comprehensive assessments over organisations people, processes and technology controls, leaving no stone unturned. All rights reserved. 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. 1. Prominent losses feature in the news cycle and continue to raise awareness of the threat of cyber attacks. We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. The following is the first blog post in a multi-part series on cybersecurity insurance produced by ACA Aponixs Thought Leadership Team. Also, if they are not protecting company assets, executives and owners will also face increased litigation. Employee awareness and reporting of anomalies to IT administrators can greatly reduce the risk of a successful attack. The risk transfer associated with services is an essential element of risk management for companies. 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. 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. 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. 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. Receiving less media attention was an attack in the US state of Florida in which a hacker attempted to tamper with the supply of chemicals at a water treatment plant and thus poison water supplies. Munich Re sees cyber premiums worldwide standing at US$ 9.2bn (beginning of 2022) and estimates that they will reach a value of approximately US$ 22bn by 2025. The increase in remote work, cloud usage, AI and the IoT expands the attack surface, making it imperative to stay alert. Slowly but surely, though, security . India was in the top three nations that have experienced a lot of ransomware attacks. These cookies ensure basic functionalities and security features of the website, anonymously. The major factors driving the market include the increasing number of sophisticated cyber-attacks amplifying the fear of financial losses . An increase to just over US$ 300bn is expected in 2022. Some criminal perpetrators also cooperate with state actors. The early approach whereby attackers specialised decryption and later on exfiltration of stolen data is evolving to include multiple extortion schemes. All industry sectors are interested in cyber insurance. 14. Quantum Computing: Quantum computing threatens traditional encryption methods used for secure data protection. . Cyber-Physical Systems (CPS) Security: Cyber-physical systems, including transportation, energy and critical infrastructure, pose security challenges as they become interconnected and autonomous. 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. the usage of cloud services of major providers, in its accumulation scenarios. Thecyber insurance market is still evolving, but according to Robinson, whats clear is that insurance providers can no longer be an organizations only risk management strategy. 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 other hand, insurers can only do so much to help businesses get their house in order. 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 MSSPs can score organisations cyber resilience based on the effectiveness of their security and data protection processes, the behaviour of their employees and the robustness of their technology infrastructures. You may be trying to access this site from a secured browser on the server. Lloyds of London announced in August 2022 that it would no longer cover losses as a result of nation state attacks. 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. In general, the cyber market as a whole is expected to continue its growth into 2020. 2) Carrier appetite for cyber risk depends on the insured's cyber hygiene. Logic would tell you that the bad guys wouldnt attack entities because theres no money for them to get. A Guide to Cyber Insurance for 2022. Looking to 2022 and beyond, it is forecasted firms will continue to experience higher premiums as insurers respond to evolving cyber threats. Making ransom demands is not the sole motivation of attackers of critical infrastructure. 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. Addressing security risks from unsecured IoT devices and sensors is critical to fully realize 5G's potential. There are multiple types of insurance policies you can get to protect your business. This coverage protects against liability for breaches involving sensitive customer information, such as SSNs, credit card details and health records. These types of attacks will remain prevalent in 2023, making employee education and training crucial in mitigating risk. 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. CNA Financial alone paid a record sum of US$ 40m to members of the Phoenix hacker group. [30] The COVID-19 pandemic is likely to have a significant impact on cyber loss activity. But such measures could have immense bearing on public entities, which are among the least prepared for cyberattacks. At the same time demand for cyber insurance has been increasing, supply has been tightening, as insurers and reinsurers take a step back and reevaluate their risk appetites. However, you may visit "Cookie Settings" to provide a controlled consent. Criminal extortion in cyberspace is becoming ever more professional and complex and is often carried out by agile, coordinated criminal networks. The dynamic of the above-mentioned transitions as well as the rising frequency and severity of cyber incidents will become manifest in an increasing demand for cyber insurance. 12 Insurance Industry Trends for 2022. The problem is thats not always the case, such as ransomware-as-a-service which are more indiscriminate attacks, he said. 3) Clients expect support, knowledge and resources. However, these policies were never priced to account for cyber warfare thats accompanying an armed conflict, or major cloud breaches that could simultaneously affect millions of cyber policyholders at the same time, Robinson said. The insurance industrys focus lies on clear wording, an adequate level of security and comprehensive transparency on risk information. 11. The range of cyber products still needs to be made better publicised and the additional benefits of those products (i.e. 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. Some decreases in the 5% range on more favorable . Enhanced scrutiny by insurers and rising premiums are impacting the amount of coverage available to firms. 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. 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. Social engineering attacks have outpaced ransomware ones this year, fuelled by the global shift to hybrid working. Satellites, drones, and real-time data sets will give insurers unprecedented visibility into the risk around facilities . 18. 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. Similarly, the number of insurers offering cyber insurance increased by about 35% between 2016 and 2019. 1 concern for the third time in four years in the 2022 Travelers Risk Index. It is extremely difficult to manage all hardware and software components from multiple providers, each potentially with its own requirements or security standards and to adequately assess the resulting risk from or through the supply chain. 10. Insurers will have a busy year as rapid growth is expected to continue. Insurance prices rose between 10% and 30% in just the. Rates experienced a significant uptick following the Colonial Pipeline and Kaseya attacks in the summer of 2021. In particular, the looming costs of a potential breach are applying additional pressure on firms to protect themselves from the possibility of staggering losses. As we look ahead, these are the top five trends we anticipate seeing in 2022. . However, trends at the end of 2022 suggest that there . 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. AXA, a French insurance firm, announced it will stop covering ransomware payments in France starting in May 2022. 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%. This is also evident from Munich Res global Cyber Risk and Insurance Survey 2022. 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 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. The problem is that they need much more information than is currently available to them, something akin to the wealth of empirical data health and car insurers can benchmark against (see Top Cybercrime Predictions for 2023). SC Media, cybersecurity experts, recently reported that cyber insurance premiums were up 5% in 2019; which, in the insurance world, are minimal increases. Risk Placement Services (RPS) says that insurance carriers have adapted to underwriting cyber risks even as threat actors raise or change their tactics. 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 . Munich Re continues to offer capacity, and our goal as market leader is clear: to jointly develop innovative, datacentric cyber solutions with our clients and partners. It involves identifying and mitigating risks through a combination of risk management, cyber defense and adherence to relevant government protocols. Key trends in the current market for cyber insurance include the following: Increasing take-up. Amid changes in the threat landscape, bans on ransomware payments and other cyber-related laws could crop up across the US. This is the dilemma both insurers and businesses will grapple with in 2023. Big Data security solutions must offer real-time analysis and monitoring and be designed to avoid performance degradation, which leads to delays in data processing. 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. Two new phishing tactics have successfully evaded anti-malware systems: PY#RATION and Blank Image Attacks. Cyber insurance is no longer deemed a nice-to-have accessory for businesses. The Global Cyber Security Insurance market is anticipated to rise at a considerable rate during the forecast period, between 2023 and 2029. . The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. OEM manufacturers and developers must prioritize IoT security to secure vulnerable devices. This cookie is set by GDPR Cookie Consent plugin. As 2023 begins, businesses must anticipate and prepare for evolving cybersecurity trends and threats. This website uses cookies to improve your experience while you navigate through the website. Cyber Insurance: Top Five Trends for 2022. Exacting cybersecurity standards must be defined and complied with by insurers and exposed industry sectors alike. Cyberattacks are increasing every year as bad actors find easy targets in companies of all sizes, particularly small to medium-sized businesses. 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. Those agencies that can differentiate themselves in the evolving cyber market stand to reap the rewards for years to come. CIS thought leaders identify cybersecurity trends the world might expect in 2021. Carriers have basically raised the bar for entry for cyber insurance, increasing the information security requirements for organizations to qualify, Robinson toldInsurance Business. Alex Smith, Intermedia Cloud Communications. Risk transparency is essential for risk management by companies and organisations. 6: Distributed decisions Executive leaders need a fast and agile cybersecurity function to support digital business priorities. The complexities that are associated with cybersecurity and the growing cyber threat are outstripping the abilities of most organizations. They will make endorsements around the vulnerabilities scanned, and if not addressed, these could impact an organizations coverage. These clauses, substantially equivalent in terms of content, will be used in policies going forward to meet specific cyber risk requirements. 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. Three cybersecurity trends with large-scale implications. They rose by 89% in the fourth quarter of 2021, according to Risk Strategies State of the Market 2022 Report. Supply Chain Security: This is the management of potential risks in the entire supply chain, including external suppliers, logistics and technology. Businesses of all sizes should have backup and disaster recovery solutions in place along with incident response plans to protect their data from ransomware attacks. The solution wont come from either side, but somewhere else entirely: managed security service providers (see 5 Most Important Cybersecurity Controls). The cybersecurity service provider Gartner estimates that, by 2025, 60% of companies will deem cybersecurity to be a key component in their IT procurement evaluation process. These high costs are ultimately driving firms to trade in the possibility of large losses for a less costly alternative by seeking cyber insurance coverage. MSSPs can support insurers first and foremost by helping businesses qualify for cyber insurance more easily. The number of companies that already have cyber insurance increased by 20%. 5. The Cybersecurity Insurance research report provides a comprehensive outlook of the market size and an industry growth forecast for 2023 to 2028. After several years of significant losses, carriers are limiting their cyber exposure with more. Cybersecurity Insurance Trends: Key Takeaways for MSPs - N-able Blog 21st February, 2023 A guide to backup retention policy best practices Understanding backup retention policy best practices can help you ensure your backups are available when you need them weeks, months, or even years later. 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.. ; Half of Marsh's U.S. clients purchased standalone cyber insurance policies in 2021, almost double the 26% of clients in 2016. 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. 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. While the cyber insurance industry has promising growth, it's also facing alarmingly increased loss activity. 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 to preventive services included in the policy, services in the area of network security, backup and password management were mentioned as priorities. 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. One factor is the increase in new technologies and new devices. 5 key cybersecurity trends for 2023. High-profile examples like the Operation Aurora attack on Google Gmail highlight the need for organizations to implement network segmentation and intrusion detection systems and collaborate with law enforcement to mitigate the risk of cyber espionage. . 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. While some are optional, some are required. 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 example, Hiscox, a leading cyber carrier, showed $1.8 billion in cyber losses in 2019, which was up 50% from the prior year. We continue to see ransomware attacks as the number one cyber threat. Cybersecurity Skills Shortage: The evolving threat landscape is leading to a shortage of cybersecurity professionals, with an estimated gap of 3.5 million globally. Dont worry about the news anymore, through our newsletter youll receive weekly access to what is happening. Despite hard conditions in the market, Robinson encourages agents and brokers not to approach cyber insurance with a negative lens. Cyberattacks are increasing every year as bad actors find easy targets in companies of all sizes, particularly small to medium-sized businesses. However, as we reported last year, the cyber insurance . Cyber Hygiene: Cyber hygiene is the practice of keeping computer systems and devices secure. The risk situation remains extremely dynamic. When attacks strike, insurers call on IR experts to verify whether the client legitimately had all the protective measures in place they said they did when applying for coverage. Many large enterprises do what it takes to bring their level of risk down to a level they can live with and afford. 7 Important Cybersecurity Trends. They should also educate employees on identifying risks and cybersecurity practices, as well as maintaining strong password hygiene. Particularly noticeable was the fact that smaller companies and government institutions often continue to be inadequately protected and are therefore more at risk overall. Insurers offer protection and thereby support the productivity and capabilities of insureds. In view of current political conflicts, this trend is not expected to wane this year. Both legislators and the insurance industry should strive increasingly on setting minimum standards for cyber resilience in companies in order to ensure sustainable improvements. Part of protecting your business is following cybersecurity industry trends, understanding how criminals penetrate systems, and taking the precautions to keep them out. Organizations must stay informed and compliant with evolving regulations to secure their systems against cyber threats. Requiring multi-factor authentications (MFA) for remote access to networks is the big thing that the insurance industry got in lockstep with over the last few years. 12. The objective will be to refine risk profiles, anticipate and classify trends and learn from claims data. Global premiums for cyber insurance are predicted to grow from US$ 9.2 billion in 2022 to US$22 billion by 2025, with some estimates suggesting they could reach over US$ 60 billion by 2029.