The latest data shows that historically massive rate increases seen over the last few years are beginning to come down, primarily due to insurers having a solid understanding of the risk.
In the last few years, the cyber insurance market has exploded – in more ways than one. First, it’s now a given that just about every organization have some level of insurance protection around cyberattacks. And second, the increases in rates have been as high as 50% quarter over quarter, as insurers have attempted to understand just how much risk is involved in insuring companies.
But a new 2022 State of the Market report from insurer Risk Strategies highlights how quarterly increases are slowing down a bit to 30-40%, with projections that rate increases could “get down to the 10-25% range in 2023 under the right conditions.”
One of the reasons may simply be that cyber insurers have a better grasp on the problem of cyber attacks. For example, of those organizations approved for cyber insurance policies, only 30% of the policies include coverage for critical risks that include ransomware, ransom negotiations and payments.
Remember, cyber insurers are in business to stay in business, so if the risk continues to increase, so will the premiums. As stated about current cyber premiums in the Risk Strategies report, “buyers with claims and industries with adverse claims experience are still seeing increases”.
This is one more affirmation that organizations should not focus on cyber insurance policies as an overarching safety net, but instead have a solid preventative security strategy (that includes Security Awareness Training) in place to keep ransomware from ever taking hold.