Those agencies that can differentiate themselves in the evolving cyber market stand to reap the rewards for years to come. 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. 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. It will remain a major threat in 2023. Ransomware-as-service is also on the rise; its predicted to be among the biggest threats to face the cyber market in the next few years. Business decision-makers cited cyber threats as their No. 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. Public awareness of digital vulnerabilities has heightened with the growth in number of serious attacks and losses. January 28th is Data Privacy Day, a reminder that organizations should review their privacy obligations. Critical vulnerabilities grew significantly in 2021, with an increase of approximately 20% (Tenable). And it is not only in Germany that the situation is tight to critical (BSI). Attackers rely on a mix of tried-and-tested methods as well as their own expanding repertoire of tactics and approaches. 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. 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. This cookie is set by GDPR Cookie Consent plugin. Understanding the current cyber risks is not rocket scienceit ultimately comes down to employees doing the wrong things and companies not doing enough to stop them. Join 300,000 other insurance professionals today. Looking to 2022 and beyond, it is forecasted firms will continue to experience higher premiums as insurers respond to evolving cyber threats. According to Cybersecurity Ventures, a ransomware attack occurred every 11 seconds in 2021. Certainly, we never want our clients to be getting less coverage than they had the year before. The objective of this series is to provide clients with the highest quality insights and expertise on the changing and evolving cyber insurance marketplace. . Sophisticated underwriters are using third-party scanning technologies to help detect security weaknesses. Munich Re expects these rules and regulations to be focused mainly to the issue of ransom payments and dealings with cryptocurrencies. We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. The sustainability of the cyber insurance market can be further improved with better resilience and innovative coverage of residual risks. The early approach whereby attackers specialised decryption and later on exfiltration of stolen data is evolving to include multiple extortion schemes. 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. Cyber-attacks are up by 93%.In 2020, more than 60% of companies were subject to ransomware demands. Criminal extortion in cyberspace is becoming ever more professional and complex and is often carried out by agile, coordinated criminal networks. The cyber insurance industry has been facing challenges in recent years due to rising rates, mass cyber-attacks, and stricter policy terms. In auto insurance, risk will shift from drivers to the artificial intelligence (AI) and software behind self-driving cars. 17. Cyber insurance policies typically require EDR because it helps to reduce the risk of a cyber attack. Some criminal perpetrators also cooperate with state actors. 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. Addressing security risks from unsecured IoT devices and sensors is critical to fully realize 5G's potential. 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. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. This is the dilemma both insurers and businesses will grapple with in 2023. 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. Amid changes in the threat landscape, bans on ransomware payments and other cyber-related laws could crop up across the US. Alex Smith, Intermedia Cloud Communications. Cybersecurity must be integrated into software, system design, coding and implementation. Scenarios such as the failure of critical infrastructure (e.g. In view of current political conflicts, this trend is not expected to wane this year. 2. This is important for insurers, as they want to ensure a level of security to minimize their potential losses in the . 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. The UK and US cyber insurance market is rife with complexity. The cookie is used to store the user consent for the cookies in the category "Other. Many large enterprises do what it takes to bring their level of risk down to a level they can live with and afford. 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. Organizations are trying to fill the worldwide gap of 3.4 million cybersecurity workers," according to (ISC), a nonprofit association composed of information security leaders. 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. After several years of significant losses, carriers are limiting their cyber exposure with more coverage restrictions and refusing to waste time on bad risks. 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. 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. Subscribe. It looks like your browser does not have JavaScript enabled. Certain classes exceeding 400%. 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. As the practice proliferates, its not only individual businesses, but also the wider industry which is set to reap the rewards in 2023 and beyond. Alarmingly, most companies are not doing enough to protect against the growing cyber threats, despite recognizing they are at risk. Advanced authentication and enhanced subscriber protection measures are necessary for secure 5G experiences. The top trends in cybersecurity are: 1. A complication for cyber-insurance: FFT on the rise. Remote Workforce Security: To ensure secure remote and hybrid work, organizations should implement strong security protocols such. 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. A Key Benefits of Innovation & Applied AI Technologies? The percentage of insurance clients opting for cyber coverage rose. And payouts are costly to insurers. If cyberattacks continue to rise, then the cyber insurance market will continue to evolve and change in order to meet the needs of policyholders. This cookie is set by GDPR Cookie Consent plugin. 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.. These cookies ensure basic functionalities and security features of the website, anonymously. In 2023, cyber hygiene remains vital to protect personal information from theft and corruption. The failure of cloud services or a multi-client data breach, for example, are covered. 9. During this same time period, the number of cyber policies increased by about 60%. 14. Prompt injection attacks on AI chatbots can reveal sensitive information about their inner workings and pose a significant threat to the security of the system. 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 Is Your Organizations Privacy Program Equipped to Tackle the Road Ahead? We continue to see ransomware attacks as the number one cyber threat. Quantum Computing: Quantum computing threatens traditional encryption methods used for secure data protection. Both legislators and the insurance industry should strive increasingly on setting minimum standards for cyber resilience in companies in order to ensure sustainable improvements. Following one such attack on Colonial Pipeline, fuel shortages and panic buying temporarily paralysed regional infrastructure on the US East Coast and made headlines worldwide. . Logic would tell you that the bad guys wouldnt attack entities because theres no money for them to get. Certain sectors will also need to work harder to meet cyber insurance requirements. Satellites, drones, and real-time data sets will give insurers unprecedented visibility into the risk around facilities . Over the next three to five years, we expect three major cybersecurity trends that cross-cut multiple technologies to have the biggest implications . They will make endorsements around the vulnerabilities scanned, and if not addressed, these could impact an organizations coverage. As a result, businesses are turning to cyber-insurance for business continuity. 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. 2023 trends for the cyber insurance market RPS pointed to several themes in the cyber insurance market for the new year: "Inside-out" underwriting Sophisticated underwriters are using. Other systemic risks however, are not insurable in the private sector. Contact our team to learn more about how we can help your firm protect and grow your business. As a key part of a comprehensive cybersecurity strategy, cyber insurance helps mitigate risks and offers peace of mind. Companies are more aware of their cyber risk and are looking at the insurance market to mitigate that risk. 6. Digitalisation is advancing in every area of the economy and society. All rights reserved. Amid changes in the threat landscape, bans on ransomware payments and other cyber-related laws could crop up across the US. Prioritized security measures, such as changing default passwords, prevent threats like Mirai malware. 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. Cybersecurity Trends in 2023. DOWNLOAD PDF. Phishing And Social Engineering: These attacks manipulate individuals through deceit. They should also educate employees on identifying risks and cybersecurity practices, as well as maintaining strong password hygiene. 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. According to Marsh, in September 2021, clients cyber premium rates per million in coverage increased 174% compared to the 12 months prior. 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. By contrast, in a cybersecurity context, attacks can have a snowball effect, with stolen data sold and circulating on the dark web for years. The following is the first blog post in a multi-part series on cybersecurity insurance produced by ACA Aponixs Thought Leadership Team. 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. Cybersecurity insurance claims are increasing. Despite hard conditions in the market, Robinson encourages agents and brokers not to approach cyber insurance with a negative lens. Cyber insurance trends to watch in 2023 Cyberattacks are becoming more sophisticated, but so are insurers. 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. Exacting cybersecurity standards must be defined and complied with by insurers and exposed industry sectors alike. The results show a further increase in the potential for integrated solutions from insurers in the market. In this market environment, we will be seeing more and more new players and participants covering risk: InsurTechs, managing general agents (MGAs) or alternative means of securitisation (ILS/ART), in which public-private partnerships may also engage in the future in order to protect areas of particular social relevance. The major factors driving the market include the increasing number of sophisticated cyber-attacks amplifying the fear of financial losses . For the majority of its relatively short life, the cyber insurance market saw rapid expansion and nimbly evolved to meet changing cyber threats. The total global economic loss due to cyber-crime is difficult to estimate. One factor is the increase in new technologies and new devices. Social engineering attackshave outpaced ransomware ones this year, fuelled by the global shift to hybrid working. However, when properly secured and monitored, AI and ML can also be used to improve cybersecurity defenses and mitigate potential threats. The risk transfer associated with services is an essential element of risk management for companies. 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. CEO of Codeproof, a cybersecurity firm that specializes in providing easy-to-use, modern mobile device management software to businesses. Despite the high level of awareness of the cyber threat there is still a gap when it comes to actual insurance of the risk. 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. 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. 19. 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. The latest trends in ransomware prevention and protection are Zero Trust Policies, Dark Web Monitoring, and Employee Cybersecurity Training with Phishing Simulations. Social engineering attacks have outpaced ransomware ones this year, fuelled by the global shift to hybrid working. However, as we reported last year, the cyber insurance . For example, ransomware programs can be rented on the dark web for US$ 40 a month. Rates experienced a significant uptick following the Colonial Pipeline and Kaseya attacks in the summer of 2021. This is also evident from Munich Res global Cyber Risk and Insurance Survey 2022. Combined with improved cybersecurity practices within organizations, this has led to rate stabilization in the marketplace. 7. Key trends in the current market for cyber insurance include the following: Increasing take-up. 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. 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). 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. These exclusions must be worded transparently and unambiguously. Two new phishing tactics have successfully evaded anti-malware systems: PY#RATION and Blank Image Attacks. 2017-2023 ACA Group. According to ENISA, the number of supply chain attacks quadrupled in 2021 compared with 2020. Crucially, they can manage a continuous testing and improvement programme affordably. The coverage limits with regard to the resilience of portfolios are mapped in accumulation scenarios, continuously monitored and, if necessary, adjusted. . Throughout these investigative processes, insurers are working more closely with cybersecurity professionals to better understand where cyber risks lie at an organization. In particular the loss-exposed sectors require proper risk coverage: healthcare, services, retail, the manufacturing sector, government institutions including the education sector, as well as financial services providers. But they have gotten out of certain industry groups that are poor performers, such asK-12 school districts, or cities and municipalities.. Internet of Things in Insurance. 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. The risk situation remains extremely dynamic. 6: Distributed decisions Executive leaders need a fast and agile cybersecurity function to support digital business priorities. Premiums flat to 20%. But opting out of some of these cookies may affect your browsing experience. While were seeing pricing easing up, were also seeing more industry specific underwriting, Robinson noted. 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 cookie is used to store the user consent for the cookies in the category "Analytics". At the same time, cyber-insurance policy providers are indicating that current approaches won't be sustainable forever. Augmented Reality/Virtual Reality (AR/VR) Security: As AR/VR usage increases, securing these technologies and the data they handle must be a priority to prevent the hacking and theft of sensitive information like credit card data and passwords through subtle facial movements recorded during speech. Beyond preparing businesses for cyber insurance, MSSPs can also help insurers in a more direct way. Cyber insurance buyers enjoyed expanding coverage terms, plentiful capacity and flat to falling rates in a highly competitive insurance marketplace. Demand for cyber insurance has grown greatly in recent years. In Munich Re's opinion, 2021 was not an exceptional year from a cyber perspective. The increase in remote work, cloud usage, AI and the IoT expands the attack surface, making it imperative to stay alert. 12 Insurance Industry Trends for 2022. 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. Cybersecurity Ventures forecasts that with further annual rate increases of 15% the loss will amount to roughly US$ 10.5tn in 2025. Ultimately, firms who do not provide the proper documentation and/or do not have the required controls in place may not be considered for coverage altogether or may incur higher premiums and/or lower coverage limits to account for their perceived added risk. /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. 3 Cyber Insurance Trends That Agents Need to Know for 2023. Please enable scripts and reload this page. The solution wont come from either side, but somewhere else entirely: managed security service providers (see 5 Most Important Cybersecurity Controls). The abundance of regulatory updates and revisions in 2022 promises tighter rules and regulations in 2023. . As we look ahead, these are the top five trends we anticipate seeing in 2022. The insurance industry can and must play a role in filling this gap, particularly for smaller businesses, but they also can't do it alone. 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. Making ransom demands is not the sole motivation of attackers of critical infrastructure. At the same time the vast majority of C-Level respondents confirm that adequate cyber security is still an issue within their companies. Identity And Access Management (IAM): IAM security manages digital identities and controls access to data, systems and resources to ensure IT security. It does not store any personal data. In their analysis of cybersecurity insurance filings in statutory financial statements, Fitch estimates that "Industry DWP for cyber coverage in standalone and package policies increased by over 22% in 2020 to approximately $2.7 billion." At the same time, only 50% reported being fully prepared" against such an incident, a Provident Bank survey found. Cybersecurity Ventures forecasts that with further annual rate increases of 15% the loss will amount to roughly US$ 10.5tn in 2025. In collaboration with various industry participants and in consultation with Munich Re, the Lloyds Market Association (LMA) has published four standard clauses to exclude cyber war from coverage. Additionally, with the growing prevalence of AI chatbots like ChatGPT, employees must be vigilant when sharing confidential information with these tools. targeted attacks on particularly lucrative extortion targets like pipelines, is not the only risk and that attacks on smaller and medium-sized government service providers or companies are also possible. 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. 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 . How IoT Technology is Reshaping Insurance Business? The third quarter increase was a 40 percentage point rise over the prior quarter, and the largest since 2015. In current data compliance dominated economies, the legal complexities . India was in the top three nations that have experienced a lot of ransomware attacks. Cybercrime As A Service (CaaS): CaaS is a dangerous business model by which cyber criminals offer hacking services and tools on the dark web for anyone to launch a cyberattack, including nontechnical individuals. 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. Some insurers charge as little as $10 a month for $25,000 worth of coverage. Read on to set your policies. Cyber insurance buyers enjoyed expanding coverage terms, plentiful capacity and flat to falling rates in a highly competitive marketplace. This cookie is set by GDPR Cookie Consent plugin. In 2023, CaaS continues to pose a threat, requiring organizations to prioritize defense through employee training, threat intelligence and incident response solutions. Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. An increase to just over US$ 300bn is expected in 2022. 15. 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.
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