Ransomware attacks are on the rise, but what’s surprising is that instead of companies getting hold more cyber insurance, there doesn’t seem to be a notable increase on premiums. (Photo : by THOMAS SAMSON/AFP via Getty Images))
Ransomware attacks are on the rise, but what's surprising is that instead of companies getting hold more cyber insurance, there doesn't seem to be a notable increase on premiums.
Compared to what happened during the peak of the global pandemic which the cyber insurance market experienced significant increases in insurance prices, this time around, there are reported double-digit price decreases from 2023 to 2024.
Due largely to firms' struggles with remote work and digital transformation, there was a spike in the number and intensity of cyberattacks in 2021 and 2022, which raised the cost of cyber insurance. However, the premiums dropped when companies bought huge stakes in cybersecurity measures, which increased the confidence of insurance companies in their capacity to mitigate cyber security risks.
The head of Howden's UK cyber retail, Sarah Neild, emphasized the critical role that multifactor authentication (MFA) and other strengthened security measures have had in this encouraging development.
According to Neild, MFA is the most basic thing to do. She underlined that cybersecurity is a multifaceted strategy and listed additional elements that promote resilience against cyber attacks, such as greater investments in IT security infrastructure and thorough personnel training.
The research showed a worrying increase in ransomware instances in spite of the overall drop in insurance prices. Following Russia's invasion of Ukraine in early 2022, which resulted in a change in the geopolitical landscape, ransomware attacks worldwide first declined. However, current data indicates that compared to the same period last year, the number of ransomware incidences in the first five months of 2024 grew by 18%.
Businesses worldwide continue to face a constant threat from ransomware, a type of malicious software that encrypts data and demands payments in Bitcoin for its restoration.
After a cyberattack, business disruption is one of the biggest expenses still incurred. However, businesses are increasingly reducing these expenses with better backup solutions, especially by using cloud providers for safe data recovery and storage. These steps help to lessen the financial effect of cyber events while also improving operational continuity.
The market dynamics for cyber insurance are also changing. Neild emphasized that despite an increase in assaults, insurers are more ready to provide cyber insurance coverage, which has further contributed to the decrease in prices.
Though there is likely to be substantial development potential in Europe, where penetration levels are now lower but are predicted to rise fast in the coming years, the United States continues to be the largest market for cyber insurance.
The research predicts that as organizations adjust to the changing threat landscape, they will continue to place a high priority on bolstering their cyber defenses. The successful management of cyber risks and the preservation of this declining trend in insurance prices will probably depend on the continued integration of cutting-edge technologies and proactive cybersecurity measures.
Even if ransomware attacks continue to be a problem, companies are finding that taking a proactive approach to cybersecurity can reduce risks and insurance costs. Businesses are urged to be alert and keep spending money on strong cybersecurity measures as the global cyber insurance industry develops in order to protect themselves from potential dangers and take advantage of new opportunities in the insurance sector.
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