Hot Market for Cyber Insurance Begins to Stabilize
The hot market for cyber insurance has stabilized after the incidents of various cyber attacks taken place in the past few years. Nowadays, no device is safe from cyber-attacks. The hackers are roaming rampantly by breaking the security of the devices. People have encountered various incidents where hackers demanded ransom to return the stolen data. Data and information have become the real asset of an individual. Hence, multiple data and security breach reports have been filed in the previous few years. It gave rise to the establishment of a hot market for cyber insurance policies.Read more
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The Aftermath of Cyber Crimes
The insurance companies along with the insured faced huge losses due to the increment in cyber crimes. Here are some repercussions that the insurer and insured had to face due to the cyber attacks.
The year when the COVID-19 pandemic came across to different nations, the work shifted to online or remote. The period came as an opportunity for cybercriminals to take advantage of the moment by infiltrating the privacy of users. S & P (Standard & Poor) Global has revealed that between 2019 and 2021, ransomware attacks under cyber security increased by 232%. In addition, the ransomware attacks in 2022 upsurge by another 25%.
Rise in Premium
Almost every firm or organization that indulges in information technology purchases a cyber insurance policy. During 2019 and 2020, the prices of cyber insurance policies witness a growth in the market. The premium almost turned double. Even in the third quarter of 2022, the prices of cyber insurance policy was raised by 48% by the insurance companies.
Losses to insurers
The insurer during 2019, 2020, and 2021 faced considerable losses in their business. Due to the failures, they were compelled to increase the cyber insurance policy price. While some insurers got insolvent in previous years.
Hot Market for Cyber Insurance
In the second half of 2022, the market stabilized by increasing the premium rate and applying the following strategies.
Improvement in Cyber Awareness
The organizations conducted several drives on cyber awareness across multiple industries. Every industry is associated with information technology; hence the threat is everywhere. Due to the awareness drive, the insurer witnesses a massive demand for cyber insurance policies and cyber security control. It helped them in moving out from the losses.
Maximization of security control
There was a need to maximize the security measure to intercept the hackers. In order to avoid cyber threats, the organization increases security control by purchasing encryption software in order to store data safely. Further, the outdated software was changed with an updated one to tackle the situation.
Focus on risk selection
The insurer has started focusing on the types of risk that may occur to an organization. In addition, the insurer has also begun to provide cyber insurance policy coverage for ransom ware.
Businesses increased security by testing inattentive staff with different means. They have also prepared to answer the questions of the insurer with regard to cyber threat incidents. As a result, businesses are ready to claim cyber insurance policies.
Due to the advent of technology, it has become complex to stop cyber threats. Therefore, a cyber insurance policy is the only means for a company to purchase protection in order to recover the losses. However, insurance companies have increased the premium prices due to the number of cases reported in the previous few years. Moreover, data is sensitive and could be worth millions on the Dark Web. Hence, a company must buy a cyber insurance policy as a backup to get more coverage.