February 28, 2023
Ransomware attacks have increased in recent years, resulting in an increase in demand for cyber insurance. However, as the cost and frequency of ransomware attacks rise, some insurers are rethinking their cyber coverage policies. As a result, some businesses are left vulnerable to cyber threats, while others are forced to pay higher premiums for the same level of protection.
But, after being battered by a rash of pandemic-era ransomware attacks, the cyber-insurance market is making a comeback. Price increases are easing, new carriers and capital sources are emerging, and businesses can now afford coverage.
According to preliminary data from insurance broker Marsh McLennan, cyber-insurance pricing increased 10% year on year in January, a fraction of the 110% annual increase reported in the first quarter of 2022. If these trends continue, prices may fall, according to Tom Reagan, Marsh’s cyber practice leader.
Old threats persisted, and new ones emerged, but the number-one threat’s frequency decreased. Much has been written about why ransomware attacks started to slow down. They range from improved baseline controls by insurers (driven in part by increased underwriting requirements for cyber coverage) to the war between Russia and Ukraine, which has forced an entire geographic hotbed of ransomware activity to shift its focus away from American interests.
Cyber criminals continue to pose enormous risks. Ransomware attacks on industrial organizations increased by 87% in 2022 compared to the previous year, according to the US Treasury Department, while financial institutions reported nearly $1.2 billion in likely ransomware-related payments in 2021. Recent high-profile breaches at ION Trading UK and a major Asian data center highlighted the grave danger posed by hackers.
The sources for this piece include an article in DataCenterKnowledge.
