Annual premiums have reached an estimated $10 billion and are expected to grow to nearly $23 billion by 2025, according to Fitch Ratings. Certainly, we never want our clients to be getting less coverage than they had the year before. Necessary cookies are absolutely essential for the website to function properly. 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. This is the nature of their relationship but it is not an exclusive one, since they usually dont work alone. An adequate level of cybersecurity increases insureds resilience and, at the same time, is a prerequisite for access to the insurance market. 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. AXA's cyber insurance covers North America and writes policies for data breach response and crisis management, privacy and security liability, business interruption, data recovery, cyber. In order to ensure the sustainability of cyber insurance, applicants must provide proof of their security standards. Carriers have basically raised the bar for entry for cyber insurance, increasing the information security requirements for organizations to qualify, Robinson toldInsurance Business. 12 Insurance Industry Trends for 2022. 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. 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. 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 $2.7 billion." CNA Financial alone paid a record sum of US$ 40m to members of the Phoenix hacker group. Addressing security risks from unsecured IoT devices and sensors is critical to fully realize 5G's potential. One factor is the increase in new technologies and new devices. Particularly noticeable was the fact that smaller companies and government institutions often continue to be inadequately protected and are therefore more at risk overall. 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. 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 ). 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. Part of protecting your business is following cybersecurity industry trends, understanding how criminals penetrate systems, and taking the precautions to keep them out. 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. These cookies will be stored in your browser only with your consent. The implementation of adequate cyber security requires increased investment. Member of the Munich Re Board of Management. The risk situation remains extremely dynamic. Both legislators and the insurance industry should strive increasingly on setting minimum standards for cyber resilience in companies in order to ensure sustainable improvements. 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. In 2021, it was estimated approximately US$ 6tn. The global cybersecurity as a service (CSaaS) market is expected to register a CAGR of 12.6% in the forecast period (2021 - 2026). 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. This coverage protects against liability for breaches involving sensitive customer information, such as SSNs, credit card details and health records. Cyber-attacks are up by 93%.In 2020, more than 60% of companies were subject to ransomware demands. Eighty-two percent of cyber insurers expect pricing to keep going up for the next two years, according to Panaseer's 2022 Cyber Insurance Market Trends Report. Cybersecurity authorities in the USA, the UK and Australia are also seeing a worldwide increase in the threat to critical infrastructure. Prioritized security measures, such as changing default passwords, prevent threats like Mirai malware. A Key Benefits of Innovation & Applied AI Technologies? In order for the market to remain viable and sustainable, these are necessary changes that need to happen. 2023 Q1 State of the Cyber Market. 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. This shortage will continue to be a concern in 2023, forcing companies to invest in training and retaining talent or outsourcing cybersecurity tasks. Price increases. According to Cybersecurity Ventures, a ransomware attack occurred every 11 seconds in 2021. Insurers offer protection and thereby support the productivity and capabilities of insureds. . Phishing And Social Engineering: These attacks manipulate individuals through deceit. Proactive cybersecurity reduces the impact of cyberattacks and can strengthen customer trust, reputation and business growth. 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. Social engineering tactics involve using manipulation to gain access to cybersecurity weaknesses. The failure of cloud services or a multi-client data breach, for example, are covered. Despite the high level of awareness of the cyber threat there is still a gap when it comes to actual insurance of the risk. 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. Communication is strengthening among governments, law enforcement, corporations, and . 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. 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. 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. The UK and US cyber insurance market is rife with complexity. Cyber-insurance trends for 2023. Cyber insurance buyers enjoyed expanding coverage terms, plentiful capacity and flat to falling rates in a highly competitive insurance marketplace. Similar to a deductible, a retention clause specifies the portion of damages policyholders will be responsible for paying before the insurance policy kicks in. 5 Trends to Ride in 2023. 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. 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. Cybersecurity Skills Shortage: The evolving threat landscape is leading to a shortage of cybersecurity professionals, with an estimated gap of 3.5 million globally. 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. AXA, a French insurance firm, announced it will stop covering ransomware payments in France starting in May 2022. After several years of significant losses, carriers are limiting their cyber exposure with more. beyond pure risk transfer) better explained to potential insureds. Dont worry about the news anymore, through our newsletter youll receive weekly access to what is happening. But perhaps the most impactful change in the market is one thathigh-risk industries such as constructionhave long-been warned about: with cyber insurance no longer seen as a mere risk-mitigation tool, it falls to businesses to reduce cyber risk internally before applying for cyber insurance (see Biggest Cyber Unicorn Startups). As to preventive services included in the policy, services in the area of network security, backup and password management were mentioned as priorities. Together with our clients and partners, we will continue to successfully and sustainably shape the cyber insurance market. Digital Life Insurance. Public awareness of digital vulnerabilities has heightened with the growth in number of serious attacks and losses. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc. 6: Distributed decisions Executive leaders need a fast and agile cybersecurity function to support digital business priorities. Some insurers charge as little as $10 a month for $25,000 worth of coverage. 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. Not only are there direct costs involved in responding to a cyber attack, but likewise there are indirect costs including disruptions to business operations and reputational losses. February 17, 2023 10:07 AM . GIPS is a registered trademark owned by CFA Institute. Munich Re expects the global cyber insurance market to reach a value of approximately USD $20bn by the year 2025. The objective will be to refine risk profiles, anticipate and classify trends and learn from claims data. The range of cyber products still needs to be made better publicised and the additional benefits of those products (i.e. . Additionally, with the growing prevalence of AI chatbots like ChatGPT, employees must be vigilant when sharing confidential information with these tools. 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. 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. 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 coverage typically includes your business's costs related to: Legal counsel to determine your notication and regulatory obligations. Prominent losses feature in the news cycle and continue to raise awareness of the threat of cyber attacks. The number of companies that already have cyber insurance increased by 20%. Risk Placement Services (RPS) says that insurance carriers have adapted to underwriting cyber risks even as threat actors raise or change their tactics. We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. With respect to the scope of cover under policies, respondents would like coverage to extend to data recovery services in an emergency, a 24-hour hotline, legal advice and forensic services. The common trend among insurers today is to look at what controls businesses have in place and how responsive they might be in the event of a cyberattack. ACA Aponixoffers the following solutions thatcan help your financial institution develop, implement, and maintain the required information security program: The SEC's Division of Examinations released its annual exam priorities, which focus on compliance, fraud prevention, risk monitoring, and informing policy. Risk transparency is essential for risk management by companies and organisations. For Robinson, the jurys still out on whether banning ransomware payments can decrease the frequency of attacks. The European Union Agency for Cybersecurity (ENISA) recognised and analysed the increased risk from cyber-attacks on or via supply chains in its Threat Landscape for Supply Chain Attacks report. Turtlefin acquired Bengaluru-based SaaS insurtech Last Decimal, Former insurance executive indicted for $2bn fraud scheme to deceive state Regulators, Insurtech Veridion secured $6mn to deepen AI comprehension of the business landscape, 2023 U.S. Munich Re significantly contributes to a sustainable market, which is essential for our clients. Do I qualify? IAM solutions enable organizations to reduce risks, comply with regulations and optimize processes. CIS thought leaders identify cybersecurity trends the world might expect in 2021. For example, the research shows a clear appetite for transforming . It reveals what's driving the increase in premiums and how the market will evolve in response to growing threats such as ransomware. Businesses must and will continue to manage the following issues: Cyber health is not the only unquantifiable factor in the cyber space risk is similarly elusive. Read on to set your policies. These factors have resulted in an overall downward trend in coverage limits. Over the next three to five years, we expect three major cybersecurity trends that cross-cut multiple technologies to have the biggest implications . In 2021 alone, the Conti group of hackers the most lucrative service provider extorted or earned at least US$ 180m from victims (Chainalysis). There were more than 700,000 cyberattacks on small businesses in 2020, totaling $2.8 billion in damages, according to the, . To achieve this, the industry must ensure a balance between offering customers attractive solutions and maintaining the necessary sustainability and profitability in the volatile cyber business. Amid changes in the threat landscape, bans on ransomware payments and other cyber-related laws could crop up across the US. While coverage limits fall and premiums soar, insurers are also expecting their clients to carry more risk through application of retention clauses. 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). Further, 88% of small business owners felt their business was vulnerable to a cyberattack," according to an SBA survey. The objective of this series is to provide clients with the highest quality insights and expertise on the changing and evolving cyber insurance marketplace. 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. 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. 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.. In Munich Res opinion, 2021 was not an exceptional year from a cyber perspective. The solution wont come from either side, but somewhere else entirely: managed security service providers (see 5 Most Important Cybersecurity Controls). Cyber Insurance: Best practices such as multi-factor authentication (MFA), secure configuration, defined patch periods, and others will be mandated as a precursor to policy underwriting. OEM manufacturers and developers must prioritize IoT security to secure vulnerable devices. Recovery and replacement of lost or stolen data. Cyber insurance trends to watch in 2023 Cyberattacks are becoming more sophisticated, but so are insurers. Organizations must stay informed and compliant with evolving regulations to secure their systems against cyber threats. The cyber insurance industry has been facing challenges in recent years due to rising rates, mass cyber-attacks, and stricter policy terms. They will make endorsements around the vulnerabilities scanned, and if not addressed, these could impact an organizations coverage. In general, the cyber market as a whole is expected to continue its growth into 2020. 8. As we look ahead, these are the top five trends we anticipate seeing in 2022. The sustainability of the cyber insurance market can be further improved with better resilience and innovative coverage of residual risks. 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. Compare roughly one-quarter (26%) in 2016 to one-half (47%) in 2020. 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. Cyber Insurance trends: pressures, perplexity and precaution The UK and US cyber insurance market is rife with complexity. Premium trends Primary. Cyberattacks are becoming more sophisticated, but so are insurers. The reasons for the rise in cyberattacksand the focus on protecting against themis multifold, Noubir says. Other systemic risks however, are not insurable in the private sector. Attackers rely on a mix of tried-and-tested methods as well as their own expanding repertoire of tactics and approaches. 5. Global supply chains and industry sectors that typically make extensive use of software and hardware from various providers are among those particularly exposed. However, when properly secured and monitored, AI and ML can also be used to improve cybersecurity defenses and mitigate potential threats. 3) Clients expect support, knowledge and resources. 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. 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. Sign up for our newsletter and be informed about new articles about your favourite topics. 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. You also have the option to opt-out of these cookies. 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. 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. At Munich Re, the development of know-how on data analytics and tools for processing relevant internal and external data is long underway. 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. Slowly but surely, though, security . 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 marketplace. Ransomware losses have dropped in the past few months, but they have increased in severity. However, you may visit "Cookie Settings" to provide a controlled consent. 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). For the majority of its relatively short life, the cyber insurance market saw rapid expansion and nimbly evolved to meet changing cyber threats. 9. . Cyber Insurance Trends 2022. While some are optional, some are required. MSSPs can support insurers first and foremost by helping businesses qualify for cyber insurance more easily. Two new phishing tactics have successfully evaded anti-malware systems: PY#RATION and Blank Image Attacks. DOWNLOAD PDF. Phishing uses fake websites to obtain personal information. Extortionists obtained ransoms averaging US$ 118,000 per successful attack (as compared to US$ 88,000 in 2020 according to Chainalysis). Cyber-Physical Systems (CPS) Security: Cyber-physical systems, including transportation, energy and critical infrastructure, pose security challenges as they become interconnected and autonomous. 18. Agents and brokers play a key role in helping clients mitigate their risk and preparing them for 2023 renewals. India was in the top three nations that have experienced a lot of ransomware attacks. During this same time period, the number of cyber policies increased by about 60%. Advanced authentication and enhanced subscriber protection measures are necessary for secure 5G experiences. While brokers and their clients should acknowledge that a lot of hard work has been done, cyber security is an evolving process. Internet Of Things (IoT) Security: IoT security protects cloud-connected devices from data breaches. In auto insurance, risk will shift from drivers to the artificial intelligence (AI) and software behind self-driving cars. In 2023, CaaS continues to pose a threat, requiring organizations to prioritize defense through employee training, threat intelligence and incident response solutions. Insurance prices rose between 10% and 30% in just the. Future growth: Forecasts suggest that cyber insurance will grow into a $20 billion industry by 2025. 13. While AXAs decision only applies to France currently, it has the potential to open the door for other insurers to follow suit in the future. Making ransom demands is not the sole motivation of attackers of critical infrastructure. Northeastern University defines multi-factor authentication as a system in which users must use two . The total global economic loss due to cyber-crime is difficult to estimate. This outside perspective is invaluable to them in the aftermath of an attack now, amidst soaring demand for coverage, insurers should look to enlist similar expert help to demystify cyber risk, even before the worst comes to pass. Artificial Intelligence (AI) And Machine Learning (ML): AI and ML could potentially pose a cyber threat, as they can be used by attackers to automate and scale their malicious activities. The strength of cyber insurers lies in providing excellent incident response (IR) and offering support when clients need it the most. As 2023 begins, businesses must anticipate and prepare for evolving cybersecurity trends and threats. Cybersecurity Ventures forecasts that with further annual rate increases of 15% the loss will amount to roughly US$ 10.5tn in 2025. And for some, coverage will simply become unattainable. It involves identifying and mitigating risks through a combination of risk management, cyber defense and adherence to relevant government protocols. By 2027, Business Insider predicts that more than 41 billion Internet of Things (IoT) devices will be . In general, though, you can expect to pay $25 to $100 per month for cyber insurance, depending on how much coverage you want and which deductible you choose. Use of multi-factor authentication. 14. Munich Re budgets for particularly critical digital dependencies, e.g. So where does increased demand, tighter terms, rising premiums, and lower coverage limits leave firms? Social engineering attacks have outpaced ransomware ones this year, fuelled by the global shift to hybrid working. Global premiums for cyber insurance are predicted to grow from US$ 9.2 billion in 2022 to US$22 billion by 2025, with some estimates suggesting they could reach over US$ 60 billion by 2029. This was a trend also observed by Munich Re in the past year. 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. 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. Beyond preparing businesses for cyber insurance, MSSPs can also help insurers in a more direct way. 19. 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. Systemic risks and accumulation scenarios require a clearly defined risk appetite, in order for innovative and sustainable protection to be offered to insureds. Geopolitics And Hybrid Warfare: The reality of geopolitics and hybrid warfare has been redefined since the Russian conflict. Robinson recommends that organizations partner with a third-party assessor to investigate vulnerabilities in their networks. Threat actors are increasingly resorting to supply chain security attacks with the potential for widespread impact. This is also evident from Munich Res global Cyber Risk and Insurance Survey 2022. All of these players will make use of expertise that has already been developed in the insurance market. MSSPs prove their worth by running comprehensive assessments over organisations people, processes and technology controls, leaving no stone unturned. CEO of Codeproof, a cybersecurity firm that specializes in providing easy-to-use, modern mobile device management software to businesses. Cyber Hygiene: Cyber hygiene is the practice of keeping computer systems and devices secure. Now, three quarters into 2022, the market is clearly showing signs of improvement: New capacity and insurers continue to enter the market. According to BusinessToday, cyber attacks increased by 50% in 2021 compared to the previous year. 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. 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. Not every successful attack is immediately known to or comprehensively understood by the victim. 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. 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.