Organizations are improving their cyber hygiene. As we look ahead, these are the top five trends we anticipate seeing in 2022. The complexities that are associated with cybersecurity and the growing cyber threat are outstripping the abilities of most organizations. Quantum Computing: Quantum computing threatens traditional encryption methods used for secure data protection. /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. During this same time period, the number of cyber policies increased by about 60%. Digital Life Insurance. In our own research on personal cyber insurance, we found that people weren't aware of the real costs of . One factor is the increase in new technologies and new devices. We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. She offers any number of insights, including that those constant rate rises are likely a . 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. . 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. Crucially, they can manage a continuous testing and improvement programme affordably. The Cyber Insurance market was. 5 key cybersecurity trends for 2023. Key practices include regularly changing passwords, configuring firewalls, encrypting data and backing up data. Keep your journey safe with more . The risk situation remains extremely dynamic. Prominent losses feature in the news cycle and continue to raise awareness of the threat of cyber attacks. Public awareness of digital vulnerabilities has heightened with the growth in number of serious attacks and losses. At Munich Re, the development of know-how on data analytics and tools for processing relevant internal and external data is long underway. At the same time, only 50% reported being fully prepared" against such an incident, a Provident Bank survey found. All rights reserved. The percentage of insurance clients opting for cyber coverage rose. Phishing uses fake websites to obtain personal information. Cyber product offerings reached significantly more decision-makers in 2022 than in the previous year (42% received an offer, compared with 34% in 2021). Digital attacks on energy providers, food providers, hospitals, administrative bodies and other areas of critical infrastructure reached a new peak last year. To sort through the latest trends, we sat down this month with Emma Werth Fekkas, RVP of underwriting at Cowbell Cyber. However, you may visit "Cookie Settings" to provide a controlled consent. 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. For example, Hiscox, a leading cyber carrier, showed $1.8 billion in cyber losses in 2019, which was up 50% from the prior year. Cyberattacks are increasing every year as bad actors find easy targets in companies of all sizes, particularly small to medium-sized businesses. In general, the cyber market as a whole is expected to continue its growth into 2020. 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 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). Find out more in ESET's Cybersecurity Trends 2023: Securing Our Hybrid Lives report. And for some, coverage will simply become unattainable. In other words, companies that aren't proactive about cyber risk management will not be considered insurable going forward. In the analogue world, it took 15 years for the provision of safety belts in German cars to be made mandatory, and many more years for them to be accepted and fastened by users in every-day life. Enhanced scrutiny by insurers and rising premiums are impacting the amount of coverage available to firms. Insurers are also leaning on supplemental applications related to firms history with ransomware and high-profile cyber breaches as an attempt to piece together firms inherent risk. Please turn on JavaScript and try again. According to a white paper produced by Intel in collaboration with key industry experts and commissioned for the UK insurance industry, there are five key questions that need to be asked: 1. By sharing their tools and expertise, criminal groups enable other perpetrators with little know-how of their own to carry out ransomware attacks and thereby help to finance established ransomware groups. 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. Social engineering attackshave outpaced ransomware ones this year, fuelled by the global shift to hybrid working. . In Section 4.1.1, OCE describes the core challenges with the current state of the cyber 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. The results show a further increase in the potential for integrated solutions from insurers in the market. 5 Trends to Ride in 2023. the usage of cloud services of major providers, in its accumulation scenarios. The U.S. market value for embedded insurance was $5 billion in 2020 and is projected to rise to more than $70 billion in 2025. Cybersecurity Ventures estimates global spending on cybersecurity in 2021 to have be US$ 262.4bn in 2021. After several years of significant losses, carriers are limiting their cyber exposure with more coverage restrictions and refusing to waste time on bad risks. Cybersecurity, Technology Risk, and Privacy, Mutual Funds, ETFs, and Other Investment Companies, Private Equity Sponsors and Portfolio Companies, take the 2022 Aponix Cyber Insurance survey here, The National Association of Insurance Commissioners, stop covering ransomware payments in France, Business Continuity Planning, Cyber Incident Response Planning, and Business Impact Analysis, Payment and Fraud Risk Assessment Services, Penetration Testing and Vulnerability Assessments, Newly Discovered Phishing Campaigns Evade Anti-Malware Systems. By acting as a black box within businesses, they can enable the notion of cyber health to be viewed on a more empirical basis than before. The increase in the number and severity of cyber attacks in 2020 and 2021 has triggered significant changes to the cyber insurance marketplace. 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%. [M] Munich Re / [P] Stanislaw Pytel / Getty Images. 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. 1 concern for the third time in four years in the 2022 Travelers Risk Index. 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 cyber-attack was discovered in time, so the population of the town of Oldsmar, near Tampa, was ultimately not in danger. Cyber insurance policies typically require EDR because it helps to reduce the risk of a cyber attack. 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. 20. In other words, companies that aren't proactive about cyber risk management will not be considered insurable going forward. 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. How Technology-First Insurers Solves Data Problems? 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. Carriers are enhancing risk engineering and risk management capabilities. Digitalisation is advancing in every area of the economy and society. Combined with improved cybersecurity practices within organizations, this has led to rate stabilization in the marketplace. The objective will be to refine risk profiles, anticipate and classify trends and learn from claims data. Realize that businesses need cybersecurity insurance like humans need water. 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. In 2021, cyberattacks on all sizes of companies were up 15%, according to a report by ThoughtLab, and the number of material breaches rose by nearly 25%. This coverage typically includes your business's costs related to: Legal counsel to determine your notication and regulatory obligations. However, as we reported last year, the cyber insurance . 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. 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. This cookie is set by GDPR Cookie Consent plugin. Critical vulnerabilities grew significantly in 2021, with an increase of approximately 20% (Tenable). Insurers will have a busy year as rapid growth is expected to continue. In current data compliance dominated economies, the legal complexities . While coverage limits fall and premiums soar, insurers are also expecting their clients to carry more risk through application of retention clauses. Demand for cyber insurance is currently growing more steadily than the capacity on offer. To secure CPS such as robots, autonomous vehicles, drones and medical devices, robust security measures such as encryption, authentication and monitoring must be implemented. These incidents can do a lot of damage to a company's network and result in serious costs to the business. Annual premiums have reached an estimated $10 billion and are expected to grow to nearly $23 billion by 2025, according to Fitch Ratings. Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet. Such issues will persist moving into 2023, but MSSPs can offer the resources required to give insurers greater peace of mind, bring more clarity and speed into operations, and help businesses qualify for the coverage of their choice faster. Cyber insurance is fundamental for the successful digitalisation of the economy. Attackers rely on a mix of tried-and-tested methods as well as their own expanding repertoire of tactics and approaches. India was in the top three nations that have experienced a lot of ransomware attacks. Ransomware: A malicious software that encrypts files and demands ransom for their decryption, ransomware attacks pose a significant threat in 2023. 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. By contrast, a standard business impact assessment can set a business back many thousands of pounds, putting them out of pocket before they can get any true value for their money. Cyber insurance may seem like uncharted territory, as threats are hard to anticipate and risk remains elevated. Cloud Security: Cloud security involves shared responsibility between the provider and the customer. Multi-factor authentication (MFA) is becoming a key requisite of many insurers alongside other controls such as the presence of an end point detection and response solution, secured and encrypted backups, privileged access management, business continuity and incident response planning, and cybersecurity awareness training to name a few. 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. Now, three quarters into 2022, the market is clearly showing signs of improvement: New capacity and insurers continue to enter the market. 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. Ransomware losses have dropped in the past few months, but they have increased in severity. 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. Together with our clients and partners, we will continue to successfully and sustainably shape the cyber insurance market. 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 . Annual premiums have reached an estimated $10 billion and are expected to grow to nearly $23 billion by 2025, according to Fitch Ratings. Alongside lower coverage limits, some insurers are reconsidering coverage altogether for certain cyber incidents such as ransomware. Insurers will be focusing even more strongly on the targeted analysis and use of data. Our approach in cyber insurance is unchanged: disciplined in underwriting and stringent in risk management. 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. Other systemic risks however, are not insurable in the private sector. [30] The COVID-19 pandemic is likely to have a significant impact on cyber loss activity. Three cybersecurity trends with large-scale implications. Businesses will similarly feel the benefits of MSSPs involvement in the process of seeking cyber insurance, as they will have a reason to work harder to improve their overall cyber resilience, and do so against clear benchmarks. Prioritized security measures, such as changing default passwords, prevent threats like Mirai malware. There are too many cybersecurity jobs and too few cybersecurity professionals. 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. You may be trying to access this site from a secured browser on the server. Some include a distributed workforce and new ransomware threats. 7 Important Cybersecurity Trends. 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. The range of cyber products still needs to be made better publicised and the additional benefits of those products (i.e. Volatile er insurance business can only be written sustainably and reliably for clients under these conditions. The cyber insurance market will continue to respond to a changing threat landscape, but also will be shaped by business, economic and regulatory forces. The cyber-insurance sphere must keep up with ransomware developments. 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. Trend No. IAM solutions enable organizations to reduce risks, comply with regulations and optimize processes. Fraudulent Funds Transfer, or FFT, is now the leading cause of cyber-insurance claims, according to Corvus Insurance. Title Insurance Industry outlook switched to negative, Insurtech Lemonade shared Q4 2022 results: premium reached $625 mn, a 64% increase, Insurtech Rootshared Q4 2022 results: written premium a ~23% decrease to $122 mn, Malaysias Insurtech PolicyStreet received license for operate in Australia, Insurtech Kanguro launches pet insurance in Florida, Insurtech Kita secured 4mn led by Octopus Ventures to combating climate change, UNIQA Insurance Group improved 2022 consolidated earnings to EUR 425 mn. On the one hand, UK businesses face a plethora of pressures from rising cyber insurance premiums - an increase of 66% year-on-year by 2022 Q3 - and shrinking coverage (see about Global Cyber Market ). Despite hard conditions in the market, Robinson encourages agents and brokers not to approach cyber insurance with a negative lens. In view of current political conflicts, this trend is not expected to wane this year. 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). And it is not only in Germany that the situation is tight to critical (BSI). 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. The cookies is used to store the user consent for the cookies in the category "Necessary". Lloyds of London announced in August 2022 that it would no longer cover losses as a result of nation state attacks. These types of attacks will remain prevalent in 2023, making employee education and training crucial in mitigating risk. There were more than 700,000 cyberattacks on small businesses in 2020, totaling $2.8 billion in damages, according to the, . 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. 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. The cyber insurance industry has been facing challenges in recent years due to rising rates, mass cyber-attacks, and stricter policy terms. The cyber insurance market has never been more confusing. 8. 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. New Technologies and Devices. SC Media, cybersecurity experts, recently reported that cyber insurance premiums were up 5% in 2019; which, in the insurance world, are minimal increases. Two new phishing tactics have successfully evaded anti-malware systems: PY#RATION and Blank Image Attacks. 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. In 2021, cyberattacks on all sizes of companies were up 15%, according to a report by. 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. 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 $2.7 billion." MSSPs prove their worth by running comprehensive assessments over organisations people, processes and technology controls, leaving no stone unturned. The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". According to our primary respondents' research, the Cyber Insurance market is predicted to grow at a CAGR of roughly 24.90% during the forecast period. Requiring multi-factor authentications (MFA) for remote access to networks is the big thing that the insurance industry got in lockstep with over the last few years. CNA Financial alone paid a record sum of US$ 40m to members of the Phoenix hacker group. 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 $7.8 billion in 2020. With the increase in the number of cyber incidents and claims filed, the industry has become less profitable. Between 2016 and 2019, the costs of cyberattacks to U.S. insurers almost doubled. The coverage limits with regard to the resilience of portfolios are mapped in accumulation scenarios, continuously monitored and, if necessary, adjusted. For example, on a scale from one to 100, scores of 75 or over may be considered best practice, though in tightly-regulated or high-risk industries, the benchmarks would differ. A complication for cyber-insurance: FFT on the rise. Not only large corporations recognise the value of effective security management; medium-sized companies, organisations, cities, municipalities and hospitals are likely to continue to invest. After several years of significant losses, carriers are limiting their cyber exposure with more. The solution wont come from either side, but somewhere else entirely: managed security service providers (see 5 Most Important Cybersecurity Controls). This development affects a multitude of sectors, including the insurance sphere. Munich Re budgets for particularly critical digital dependencies, e.g. Beyond preparing businesses for cyber insurance, MSSPs can also help insurers in a more direct way. Fraudulent Funds Transfer (FFT) is a type of cyber-attack where criminals use social engineering tactics to trick Accounts Payable (AP) staff into transferring funds to illegitimate bank accounts.. FFT is closely linked with Business Email Compromise (BEC). In 2021 alone, the Conti group of hackers the most lucrative service provider extorted or earned at least US$ 180m from victims (Chainalysis). Is Your Organizations Privacy Program Equipped to Tackle the Road Ahead? All of these players will make use of expertise that has already been developed in the insurance market. 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. 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. The imbalance of supply and demand in the cyber insurance market has resulted in soaring premium rates. 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. As we look ahead, these are the top five trends we anticipate seeing in 2022. While 88% of company boards regard cybersecurity as a business risk rather than solely a technical IT problem," only 13% of boards have actually instituted a cybersecurity-specific board or committee, according to a cybersecurity report from Gartner. But what is good cyber health anyway? Munich Re is one of the market and opinion leaders in the cyber insurance sector. 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. They rose by 89% in the fourth quarter of 2021, according to Risk Strategies State of the Market 2022 Report. Specifically, if firms are determined to be of high risk, insurers are less likely to offer them a higher coverage limit or coverage altogether. Key trends in the current market for cyber insurance include the following: Increasing take-up. Ransomware is becoming more common - and expensive. Please enable scripts and reload this page. Global supply chains and industry sectors that typically make extensive use of software and hardware from various providers are among those particularly exposed. It reveals what's driving the increase in premiums and how the market will evolve in response to growing threats such as ransomware. . Cybersecurity must be integrated into software, system design, coding and implementation. But such measures could have immense bearing on public entities, which are among the least prepared for cyberattacks. Insurers offer protection and thereby support the productivity and capabilities of insureds. 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. Robinson recommends that organizations partner with a third-party assessor to investigate vulnerabilities in their networks. Subscribe to our Newsletter to increase your edge. 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. In order to ensure the sustainability of cyber insurance, applicants must provide proof of their security standards. 7. Read more eBook Compared with the previous year, thesurvey shows that cyber insurance is becoming increasingly popular. 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
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