As cyber security risks continue to rise, the question of whether your company’s data is secure and covered has re-emerged. With the threat of ransomware attacks and other forms of data breaches, it’s essential that you and your business understand how much protection you need and which policies you should be considering. Fortunately, the crossroads of cyber insurance is evolving rapidly and Insurtech start-ups are getting involved.
Ransomware attacks are becoming increasingly pernicious
Ransomware is a pernicious and increasing threat to businesses and organizations. Ransomware is an encryption program that locks up computers, preventing users from accessing critical information.
Ransomware has become a lucrative criminal business model. During the past five years, cybercriminals have targeted professional services firms and local governments. During that time, they made a reported $321 million in claimed losses.
These attacks are a costly disruption to business operations and threaten the security of critical infrastructure. Many companies required to make significant investments in cybersecurity.
The most recent ransomware attack, which targeted the Atlanta area, involved a shadowy hacking crew that encrypted victims’ files. The group offered victims a week to pay the ransom before their files deleted permanently.
In an interview with Bloomberg, Allan Liska, senior intelligence analyst at Recorded Future, explained that the attack is one of several that involve the SamSam hacking crew. The group is known for its high ransom demands.
Insurtech companies are beginning to address the cyber insurance market
Cyber insurance is one of the fastest growing sectors in the insurance industry. It requires new approaches and products for underwriting, detecting and mitigating risk.
Insurtech firms are addressing the cyber insurance market with innovation. These firms are integrating technology into underwriting processes and building platforms to monitor and provide security services to policyholders. Insurtechs are also trying to make the process easier for policyholders.
Insurtechs offer a better experience for policyholders by streamlining the insurance journey from inquiry to enrollment. They also lower overhead costs. Many insurtechs offer proprietary technology, while others bundle insurance with third party solutions.
Insurtechs are making progress in the cyber insurance space, but there is still a lot of work to done. Insurtechs are working to help insurers offer more comprehensive coverage, while also improving customer service.
Insurtechs are also partnering with big players like Generali, Google, and Allianz. These partnerships help them gain expertise in a specific industry. This could lead to M&A opportunities.
Cyber insurance isn’t vanishing, as some fear, but it’s getting pricier
The cyber insurance industry is expanding rapidly, but premiums continue to increase. Several factors are contributing to these changes.
The growing number of companies that are looking for coverage, as well as the increased demand for policies, are driving up the cost of insurance. It’s also putting pressure on insurers to reduce their exposure to cyber losses.
For example, some carriers have trimmed their cyber limits. Some smaller insurers have pulled out of the market completely.
Insurers are also struggling to model the current risks. As a result, they’re trying to reduce their losses by making their cyber security protocols mandatory.
These strategies are necessary, but they may also lead to higher rates for organizations that can’t meet the qualifying requirements. It’s also important to understand that some insurers have adjusted their underwriting practices to meet this growth in the sector.
Cyber insurance providers have responded by increasing their rates. This is because of the high demand for protection, which has fueled by the increasing frequency of cyberattacks.
