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A recent report published by Cyber Security intelligence (CSI) found that an alarming number of businesses need more confidence in the current offerings of Cyber Insurance. Eight in ten cyber security decision-makers were wary if Cyber Insurance can cover their cyber risk in 2023.
According to Security Brief’s journalist Shannon Williams, the report showed that only 29 per cent of the respondents were confident in their compliance with the cyber insurance requirements stipulated by insurance companies.
Williams added that “the rise of ransomware attacks and insurance companies paying hundreds of millions in cybersecurity-related claims yearly are being blamed for organisations now facing rising cyber insurance rates, tightening standards, and limiting coverage. With average ransom payments reaching $812,000 during 2021, the true cost of ransomware is, in fact, much more when the cost of downtime and reputational damage is factored in.”
The report also noted that the risk level would also increase, with 87 per cent of the participating organisations thinking that the risk of a cyber attack will increase as the current economic conditions worsen.
Nick Westall, CTO of CSI, noted that though having cyber insurance is a good option for organisations to protect themselves, many companies may only be eligible if they submit to the stricter requirements, such as demonstrating a solid security structure. He added that companies should look to beef up their existing security measures.
These changes, along with the rising cost of insurance premiums, are caused by the significant and continued growth of cyber attacks, according to Sean Moran, a researcher for JUMPSEC. He noted that “the Merck and Mondelez insurance settlements of $1.4b and up to $100m due to the Russian NotPetya attacks in 2017 provoked insurers to tighten terminology on ‘state actor’ attacks to limit their risk exposure further, while simultaneously raising premiums.”
Moran also noted what Tony Chaudhry, underwriting director for Lloyds, said that losses could be significantly more than what the insurance market can absorb. This is why more stringent measures are implemented before companies acquire sufficient coverage.
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