Almost exactly a year ago, cybersecurity professionals were locked in a heated debate about insurance. While some were keen to point out that the future of the industry would need to include some form of insurance market, others argued that cyber insurance would never be worth the premiums, especially given the inherently volatile nature of cybersecurity.
The pandemic has changed all of that. According to the FBI, cyberattacks have increased by almost 400% since the start of the pandemic, and 68% of companies have reported that they’ve seen increases in fraud. In addition to this rising threat level, we’ve also seen attacks on many companies that had previously been regarded as low-risk, especially mid-sized enterprises.
This has led, unsurprisingly, to a booming market in cyber insurance. In this article, we’ll take a look at how the market has changed in the last 12 months and where it will go from here.
The current state of the cyber insurance industry is summed up in two recent reports: one by KPMG and another by Allianz.
Both reports make for sobering reading. KPMG discovered that 74% of businesses do not have any sort of cyber liability insurance. Of those that do have it, only 48% believed their coverage would cover the actual cost of a breach. At the same time, Allianz’s report indicates that the level of risk faced by the average company has increased dramatically in the last year.
This second report, entitled Managing The Impact Of Increasing Interconnectivity – Trends in Cyber Risk, analyzes 1,736 cyber-related insurance claims worth EUR 660 million ($US 770 million) involving AGCS and other insurers from 2015 to 2020. It found a 70%+ increase in the average cost of cybercrime to an organization over five years (now up to $13 million) (Read more...)
*** This is a Security Bloggers Network syndicated blog from The State of Security authored by Tripwire Guest Authors. Read the original post at: https://www.tripwire.com/state-of-security/security-data-protection/cyber-security/changing-dynamics-cyber-insurance/