. 3. In Section 4.1.1, OCE describes the core challenges with the current state of the cyber Cyber Insurance trends: pressures, perplexity and precaution The UK and US cyber insurance market is rife with complexity. The Cybersecurity Insurance research report provides a comprehensive outlook of the market size and an industry growth forecast for 2023 to 2028. 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. 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). 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. She offers any number of insights, including that those constant rate rises are likely a . Flock raises $38 millon for insurance that enables quantifiably safer motor fleets, CyberSmart Raises 13M to Expand Cybersecurity Solutions, Altai Ventures launches $53mn fund to invest in insurtechs. 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. In order for the market to remain viable and sustainable, these are necessary changes that need to happen. The Cyber Insurance market was. To secure CPS such as robots, autonomous vehicles, drones and medical devices, robust security measures such as encryption, authentication and monitoring must be implemented. Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet. While coverage limits fall and premiums soar, insurers are also expecting their clients to carry more risk through application of retention clauses. Price increases. 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. 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. The cookie is used to store the user consent for the cookies in the category "Other. Annual premiums have reached an estimated $10 billion and are expected to grow to nearly $23 billion by 2025, according to Fitch Ratings. As we look ahead, these are the top five trends we anticipate seeing in 2022. Looking to 2022 and beyond, it is forecasted firms will continue to experience higher premiums as insurers respond to evolving cyber threats. These cookies ensure basic functionalities and security features of the website, anonymously. Cyber insurance is an insurance product designed to help businesses hedge against the potentially devastating effects of cybercrimes such as malware, ransomware, distributed denial-of-service (DDoS) attacks, or any other method used to compromise a network and sensitive data. This coverage protects against liability for breaches involving sensitive customer information, such as SSNs, credit card details and health records. Some decreases in the 5% range on more favorable . Global premiums for cyber insurance are predicted to grow from US$ 9.2 billion in 2022 to US$22 billion by 2025, with some estimates suggesting they could reach over US$ 60 billion by 2029. Demand for cyber insurance is currently growing more steadily than the capacity on offer. Compare roughly one-quarter (26%) in 2016 to one-half (47%) in 2020. For starters, industry professionals advise firms who already have cyber insurance or those considering obtaining coverage for the first time to begin the process sooner rather than later. Social engineering tactics involve using manipulation to gain access to cybersecurity weaknesses. telecommunications or the power supply), as well as a possible cyber war, exceed the limits of insurability and are consequently excluded. And it is not only in Germany that the situation is tight to critical (BSI). These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc. [30] The COVID-19 pandemic is likely to have a significant impact on cyber loss activity. AXA, a French insurance firm, announced it will stop covering ransomware payments in France starting in May 2022. They can ask the right questions, carry out assessments or penetration testing, as well as guide businesses to reach the required level of cyber resilience faster. These factors have resulted in an overall downward trend in coverage limits. We continue to see ransomware attacks as the number one cyber threat. 7. Premium increases 30-150%. This cookie is set by GDPR Cookie Consent plugin. Keep your journey safe with more . For example, Hiscox, a leading cyber carrier, showed $1.8 billion in cyber losses in 2019, which was up 50% from the prior year. Understanding the current cyber risks is not rocket scienceit ultimately comes down to employees doing the wrong things and companies not doing enough to stop them. Ransomware is becoming more common - and expensive. The reason for this is simple: Cyber claims frequency and severity are increasing, which means carriers must improve their profitability to remain viable in this evolving segment. Cybersecurity Ventures forecasts that with further annual rate increases of 15% the loss will amount to roughly US$ 10.5tn in 2025. Our approach in cyber insurance is unchanged: disciplined in underwriting and stringent in risk management. This was a trend also observed by Munich Re in the past year. First-party cyber coverage protects your data, including employee and customer information. 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. Since cyber-attacks are inevitable, it has become necessary to get yourself covered under a cyber insurance policy. This website uses cookies to improve your experience while you navigate through the website. Recovery and replacement of lost or stolen data. Munich Re expects the global cyber insurance market to reach a value of approximately USD $20bn by the year 2025. GIPS is a registered trademark owned by CFA Institute. Key practices include regularly changing passwords, configuring firewalls, encrypting data and backing up data. This cookie is set by GDPR Cookie Consent plugin. the usage of cloud services of major providers, in its accumulation scenarios. 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. Premiums flat to 20%. Cyber insurance buyers enjoyed expanding coverage terms, plentiful capacity and flat to falling rates in a highly competitive insurance marketplace. Part of protecting your business is following cybersecurity industry trends, understanding how criminals penetrate systems, and taking the precautions to keep them out. 1 concern for the third time in four years in the 2022 Travelers Risk Index. Cyber-Physical Systems (CPS) Security: Cyber-physical systems, including transportation, energy and critical infrastructure, pose security challenges as they become interconnected and autonomous. Insurers will have a busy year as rapid growth is expected to continue. Demand for cyber insurance has grown greatly in recent years. 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. Cyberattacks are becoming more sophisticated, but so are insurers. But such measures could have immense bearing on public entities, which are among the least prepared for cyberattacks. Experts predict that the increasingly agility and professionalism of cyber criminals will allow them to earn more than the global drugs trade. Ransomware and cyber-attacks on both supply chains and critical infrastructures pose a greater threat than ever to companies and society. 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. 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. Cyber-attacks are up by 93%.In 2020, more than 60% of companies were subject to ransomware demands. Blockchain Security: Blockchain security requires risk assessment, implementation of cybersecurity frameworks, security testing and secure coding to protect against online fraud and cyberattacks, helping ensure the continued growth of blockchain technology. Munich Res current Global Cyber Risk and Insurance Study shows that the proportion of decision-makers who are seriously worried about potential cyber-attacks on their companies has increased significantly to 38%, compared with the previous years figure of 30%. At the same time, cyber-insurance policy providers are indicating that current approaches won't be sustainable forever. Read more eBook Expertise from Forbes Councils members, operated under license. 5. Fraudulent Funds Transfer, or FFT, is now the leading cause of cyber-insurance claims, according to Corvus Insurance. Insurers offer protection and thereby support the productivity and capabilities of insureds. On the one hand, UK businesses face a plethora of pressures from rising cyber insurance premiums an increase of66%year-on-year by 2022 Q3 and shrinking coverage (see about Global Cyber Market). Today, companies are more aware of their cyber risk and are looking at the insurance market to mitigate that risk. In 2023, CaaS continues to pose a threat, requiring organizations to prioritize defense through employee training, threat intelligence and incident response solutions. Phishing And Social Engineering: These attacks manipulate individuals through deceit. Phishing uses fake websites to obtain personal information. They rose by 89% in the fourth quarter of 2021, according to Risk Strategies State of the Market 2022 Report. MSSPs prove their worth by running comprehensive assessments over organisations people, processes and technology controls, leaving no stone unturned. It is extremely difficult to manage all hardware and software components from multiple providers, each potentially with its own requirements or security standards and to adequately assess the resulting risk from or through the supply chain. Prominent losses feature in the news cycle and continue to raise awareness of the threat of cyber attacks. Munich Re sees cyber premiums worldwide standing at US$ 9.2bn (beginning of 2022) and estimates that they will reach a value of approximately US$ 22bn by 2025. Your budget should include obtaining the required insurance policies according to state and local laws. Certainly, we never want our clients to be getting less coverage than they had the year before. 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). Ransomware losses have dropped in the past few months, but they have increased in severity. The Global Cyber Security Insurance market is anticipated to rise at a considerable rate during the forecast period, between 2023 and 2029. . While some are optional, some are required. Crucially, they can manage a continuous testing and improvement programme affordably. 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. 19. Together with our clients and partners, we will continue to successfully and sustainably shape the cyber insurance market. Trend #1: Increase in Demand With the increase in the number and cost of cyber incidents globally, more firms are recognizing they are not immune to attack and subsequently seeing enhanced utility in cyber insurance. It will remain a major threat in 2023. 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. Alarmingly, most companies are not doing enough to protect against the growing cyber threats, despite recognizing they are at risk. Social engineering tactics involve using manipulation to gain access to cybersecurity weaknesses. 2022 Cyber Insurance Market Trends Report. The cyber insurance market is hardening and becoming more mature as years pass and the market shifts and accommodates to new trends and data points. Particularly noticeable was the fact that smaller companies and government institutions often continue to be inadequately protected and are therefore more at risk overall. One factor is the increase in new technologies and new devices. In other words, companies that aren't proactive about cyber risk management will not be considered insurable going forward. The problem is thats not always the case, such as ransomware-as-a-service which are more indiscriminate attacks, he said. Making ransom demands is not the sole motivation of attackers of critical infrastructure. 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. If cyberattacks continue to rise, then the cyber insurance market will continue to evolve and change in order to meet the needs of policyholders. 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. 8. According to Marsh, in September 2021, clients cyber premium rates per million in coverage increased 174% compared to the 12 months prior. Our offering increases our insureds resilience and improves the protection of digital business models. As risk becomes easier to quantify, insurers may feel more confident to offer lower premiums over time, which may attract more businesses to seek coverage over the longer term. Cyber Insurance Trends 2022. Systemic risks and accumulation scenarios require a clearly defined risk appetite, in order for innovative and sustainable protection to be offered to insureds. The reasons for the rise in cyberattacksand the focus on protecting against themis multifold, Noubir says. 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. 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. [313 Pages Report] The global Cybersecurity Insurance Market size is projected to grow from USD 11.9 billion in 2022 to USD 29.2 billion by 2027, at a CAGR of 19.6 during the forecast period. Cyber insurance is particularly attractive to small and medium-sized organizations that don't have the means to self-insure and are not confident that their security is likely to withstand attack. 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. 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. As a result, businesses are turning to cyber-insurance for business continuity. The cyber-insurance sphere must keep up with ransomware developments. Cyber-insurance trends for 2023. and refusing to waste time on bad risks. If those trends continue, prices could be set to decline, said Tom Reagan, Marsh's cyber practice leader. Volatile er insurance business can only be written sustainably and reliably for clients under these conditions. Here are the top 20 cybersecurity trends to keep an eye on: 1. New Technologies and Devices. 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. 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. 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. 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. Robinson recommends that organizations partner with a third-party assessor to investigate vulnerabilities in their networks. 20. 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. Geopolitics And Hybrid Warfare: The reality of geopolitics and hybrid warfare has been redefined since the Russian conflict. While were seeing pricing easing up, were also seeing more industry specific underwriting, Robinson noted. Carriers have basically raised the bar for entry for cyber insurance, increasing the information security requirements for organizations to qualify, Robinson toldInsurance Business. 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. Use of multi-factor authentication. The objective will be to refine risk profiles, anticipate and classify trends and learn from claims data. /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. Find out more in ESET's Cybersecurity Trends 2023: Securing Our Hybrid Lives report.