Carriers are little more comfortable [with some sectors] as we see information security postures in a better place overall. Quantum Computing: Quantum computing threatens traditional encryption methods used for secure data protection. Available to download is a free sample file of the Cybersecurity Insurance report . 2. OEM manufacturers and developers must prioritize IoT security to secure vulnerable devices. Here are the top 20 cybersecurity trends to keep an eye on: 1. Communication is strengthening among governments, law enforcement, corporations, and . In Q4 of 2021, Marsh reported 60% of its clients had taken on increased retentions in an attempt to keep their premium rates at bay. In other industries, reputational damage tends to occur in the aftermath of one-off events such as natural disasters and can often be predicted to some extent (see Global Cyber Crime, Fraud & Ransomware Survey). Munich Re continues to offer capacity, and our goal as market leader is clear: to jointly develop innovative, datacentric cyber solutions with our clients and partners. An increase to just over US$ 300bn is expected in 2022. As the three previous trends discussed how certain aspects of the cybersecurity industry will continue to grow in 2023, expect the same from the cyber insurance market. 2017-2023 ACA Group. Together with our clients and partners, we will continue to successfully and sustainably shape the cyber insurance market. Cyber insurance trends to watch in 2023 Cyberattacks are becoming more sophisticated, but so are insurers. This report highlights some of the main cyber risk trends we see from an underwriting, risk consulting and claims perspective, such as the growing cost of ransomware attacks - which has been the major loss driver in recent years, the targeting of more smallersized companies by hackers, the increasing frequency and sophistication of business The latest trends in ransomware prevention and protection are Zero Trust Policies, Dark Web Monitoring, and Employee Cybersecurity Training with Phishing Simulations. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. Critical vulnerabilities grew significantly in 2021, with an increase of approximately 20% (Tenable). Fraudulent Funds Transfer (FFT) is a type of cyber-attack where criminals use social engineering tactics to trick Accounts Payable (AP) staff into transferring funds to illegitimate bank accounts.. FFT is closely linked with Business Email Compromise (BEC). The cyber insurance market is hardening and becoming more mature as years pass and the market shifts and accommodates to new trends and data points. 10. In their analysis of cybersecurity insurance filings in statutory financial statements, Fitch estimates that "Industry DWP for cyber coverage in standalone and package policies increased by over 22% in 2020 to approximately $2.7 billion." CFA Institute does not endorse, promote or warrant the accuracy or quality of ACA Group. Augmented Reality/Virtual Reality (AR/VR) Security: As AR/VR usage increases, securing these technologies and the data they handle must be a priority to prevent the hacking and theft of sensitive information like credit card data and passwords through subtle facial movements recorded during speech. By 2027, Business Insider predicts that more than 41 billion Internet of Things (IoT) devices will be . These cookies track visitors across websites and collect information to provide customized ads. Social engineering tactics involve using manipulation to gain access to cybersecurity weaknesses. By clicking Accept All, you consent to the use of ALL the cookies. This development affects a multitude of sectors, including the insurance sphere. In current data compliance dominated economies, the legal complexities . The implementation of adequate cyber security requires increased investment. 6: Distributed decisions Executive leaders need a fast and agile cybersecurity function to support digital business priorities. Cyber Hygiene: Cyber hygiene is the practice of keeping computer systems and devices secure. In 2021, cyberattacks on all sizes of companies were up 15%, according to a report by. The strength of cyber insurers lies in providing excellent incident response (IR) and offering support when clients need it the most. AXAs decision is a response to the growing losses incurred from ransomware attacks by insurers as well as pressure from government officials who claim cyber insurance payouts are contributing to the rise in ransomware attacks. 20. So where does increased demand, tighter terms, rising premiums, and lower coverage limits leave firms? Premium trends Primary. Data from a global insurance broker indicate its clients' take-up rate (proportion of existing clients electing coverage) for cyber insurance rose from 26 percent in 2016 to 47 percent in 2020 (see figure). The insurance industrys focus lies on clear wording, an adequate level of security and comprehensive transparency on risk information. By engaging early in the planning and application process, firms will be able to better identify existing gaps in their security and work to remedy them to increase their chances of securing a policy with more attractive rates and coverage. For example, on a scale from one to 100, scores of 75 or over may be considered best practice, though in tightly-regulated or high-risk industries, the benchmarks would differ. telecommunications or the power supply), as well as a possible cyber war, exceed the limits of insurability and are consequently excluded. Dont worry about the news anymore, through our newsletter youll receive weekly access to what is happening. Multi-factor authentication (MFA) is becoming a key requisite of many insurers alongside other controls such as the presence of an end point detection and response solution, secured and encrypted backups, privileged access management, business continuity and incident response planning, and cybersecurity awareness training to name a few. India was in the top three nations that have experienced a lot of ransomware attacks. We continue to see ransomware attacks as the number one cyber threat. Cyber-insurance pricing increased 10% from a year earlier in January, . The cyber insurance market will continue to respond to a changing threat landscape, but also will be shaped by business, economic and regulatory forces. Munich Re budgets for particularly critical digital dependencies, e.g. Our approach in cyber insurance is unchanged: disciplined in underwriting and stringent in risk management. Cyber insurance generally covers liability in the event of an attack (like ransomware) or breach where sensitive data may be compromised, whether that's social security numbers, driver's license numbers, payment card information, and health records; anything that is identifiable to an individual. DOWNLOAD PDF. 12. Organizations are trying to fill the worldwide gap of 3.4 million cybersecurity workers," according to (ISC), a nonprofit association composed of information security leaders. Ransomware business reached a new peak last year and is attracting more and more criminals. With the increased use of new technologies and the continuous growth of digital dependencies, the prospect of new threat scenarios materialising in the future is a real one. This cookie is set by GDPR Cookie Consent plugin. Particularly noticeable was the fact that smaller companies and government institutions often continue to be inadequately protected and are therefore more at risk overall. Cyber-insurance trends for 2023. And while attacks on large organizations like the Colonial Pipeline have captured the headlines, in fact 50% to 70% have targeted small and medium-sized companies, underscoring the wide reaching implications of this threat. Certainly, we never want our clients to be getting less coverage than they had the year before. For example, access to the insurance market requires fundamental resilience-enhancing measures, such as access management, robust network security, the continuous patching of vulnerabilities and the presence of backups. Its a positive sign shining light into a tumultuous market, which in 2023 will continue to face capacity challenges driven by increased demand, two-plus years of significant premium increases, more judicious limits deployment, and the exit of some players from the market, according to Steve Robinson (pictured), area president and national cyber practice leader for RPS. In Munich Re's opinion, 2021 was not an exceptional year from a cyber perspective. Crucially, they can manage a continuous testing and improvement programme affordably. The results show a further increase in the potential for integrated solutions from insurers in the market. In 2021 alone, the Conti group of hackers the most lucrative service provider extorted or earned at least US$ 180m from victims (Chainalysis). It does not store any personal data. Companies can address and mitigate the disruptions of the future only by taking a more proactive, forward-looking stancestarting today. 5 Trends to Ride in 2023. Regional opportunities, Latest trends and dynamics . Munich Re supports government and private-sector initiatives to curb ransomware, such as the Ransomware Task Force (RTF) initiated by the US Institute for Security and Technology, and is also a member of the EU-wide No More Ransom initiative. They will make endorsements around the vulnerabilities scanned, and if not addressed, these could impact an organizations coverage. 5G Security: 5G security protects high-speed mobile services for billions of devices and the IoT. The Top Five Cybersecurity Trends In 2023 More From Forbes Feb 27, 2023,12:01am EST AI, An Amplifier Of Human Intelligence Feb 26, 2023,07:00am EST Software Ate The World, But Not Only In The. Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. Social engineering attacks have outpaced ransomware ones this year, fuelled by the global shift to hybrid working. In order for the market to remain viable and sustainable, these are necessary changes that need to happen. Geopolitics And Hybrid Warfare: The reality of geopolitics and hybrid warfare has been redefined since the Russian conflict. During this same time period, the number of cyber policies increased by about 60%. Sophisticated underwriters are using third-party scanning technologies to help detect security weaknesses. As a result, insurers are focusing more intensely on risk selection by asking more questions and requiring more documentation to evaluate firms cyber programs. Member of the Munich Re Board of Management. But such measures could have immense bearing on public entities, which are among the least prepared for cyberattacks. You may be trying to access this site from a secured browser on the server. However, there is still a lot more to be done to achieve increased cybersecurity and progress has been slow up to now. In collaboration with various industry participants and in consultation with Munich Re, the Lloyds Market Association (LMA) has published four standard clauses to exclude cyber war from coverage. Attackers often plan their attacks for the long term and maximise the impact by targeting supply chains and industrial or automated processes. Other systemic risks however, are not insurable in the private sector. January 28th is Data Privacy Day, a reminder that organizations should review their privacy obligations. Insurers offer protection and thereby support the productivity and capabilities of insureds. This is why, for example, insurers are treading with trepidation around building reputational damage into business and cyber packages. The increase in the number and severity of cyber attacks in 2020 and 2021 has triggered significant changes to the cyber insurance marketplace. We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. It will remain a major threat in 2023. Companies with at least $200 million in cyber insurance account for a bit more than 20% of what is believed to be $5 billion in global cyber insurance premium, according to internal research. Independent Insurance Agents & Brokers of America, Inc. Do You Know How Much Insurance Fraud Costs the Industry? However, when properly secured and monitored, AI and ML can also be used to improve cybersecurity defenses and mitigate potential threats. For starters, industry professionals advise firms who already have cyber insurance or those considering obtaining coverage for the first time to begin the process sooner rather than later. Phishing uses fake websites to obtain personal information. The major factors driving the market include the increasing number of sophisticated cyber-attacks amplifying the fear of financial losses . There are too many cybersecurity jobs and too few cybersecurity professionals. Ransomware losses have dropped in the past few months, but they have increased in severity. Managed security service providers (MSSPs) can do this for them, and in 2023, their role will become more pronounced. Fraud and cybersecurity have largely been understood (and run) as independent of one another, yet both disciplines are a part of the broader security world. For the majority of its relatively short life, the cyber insurance market saw rapid expansion and nimbly evolved to meet changing cyber threats. Prompt injection attacks on AI chatbots can reveal sensitive information about their inner workings and pose a significant threat to the security of the system. There were more than 700,000 cyberattacks on small businesses in 2020, totaling $2.8 billion in damages, according to the, . This coverage typically includes your business's costs related to: Legal counsel to determine your notication and regulatory obligations. While often retention policies are being demanded by the insurers, some policy applicants are willingly taking on higher retention rates in the hopes of minimizing their premium hikes. Organizations are improving their cyber hygiene. These high costs are ultimately driving firms to trade in the possibility of large losses for a less costly alternative by seeking cyber insurance coverage. Agents and brokers play a key role in helping clients mitigate their risk and preparing them for 2023 renewals. There are multiple types of insurance policies you can get to protect your business. Read on to set your policies. How IoT Technology is Reshaping Insurance Business? Social engineering attackshave outpaced ransomware ones this year, fuelled by the global shift to hybrid working. Over the next three to five years, we expect three major cybersecurity trends that cross-cut multiple technologies to have the biggest implications . Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc. Dean Mechlowitz and Bill Haber are the founders of TEKRiSQ, a technology company in Ponte Vedra Beach, Florida. 6. This cookie is set by GDPR Cookie Consent plugin. The range of cyber products still needs to be made better publicised and the additional benefits of those products (i.e. To counter this, companies should adopt quantum-resistant encryption algorithms using quantum random number generators instead of relying on vulnerable traditional pseudo-random number generators. In-depth industry statistics and market share insights of the Cybersecurity Insurance sector for 2020, 2021, and 2022. In 2021, cyberattacks on all sizes of companies were up 15%, according to a report by ThoughtLab, and the number of material breaches rose by nearly 25%. Looking to 2022 and beyond, it is forecasted firms will continue to experience higher premiums as insurers respond to evolving cyber threats. Receiving less media attention was an attack in the US state of Florida in which a hacker attempted to tamper with the supply of chemicals at a water treatment plant and thus poison water supplies. Some include a distributed workforce and new ransomware threats. To continue playing a leading role in shaping the market, Munich Re is pursuing a learning strategy and continuing to invest in dedicated cyber teams and expertise. But opting out of some of these cookies may affect your browsing experience. Companies are more aware of their cyber risk and are looking at the insurance market to mitigate that risk. Cyber-Physical Systems (CPS) Security: Cyber-physical systems, including transportation, energy and critical infrastructure, pose security challenges as they become interconnected and autonomous. Sign up for our newsletter and be informed about new articles about your favourite topics. Robinson recommends that organizations partner with a third-party assessor to investigate vulnerabilities in their networks. On the one hand, UK businesses face a plethora of pressures from rising cyber insurance premiums - an increase of 66% year-on-year by 2022 Q3 - and shrinking coverage (see about Global Cyber Market ). While were seeing pricing easing up, were also seeing more industry specific underwriting, Robinson noted. Cyber Insurance: Best practices such as multi-factor authentication (MFA), secure configuration, defined patch periods, and others will be mandated as a precursor to policy underwriting. 3 Cyber Insurance Trends That Agents Need to Know for 2023. To secure against evolving cyber threats, businesses in 2023 must adopt advanced security technologies, continually test and update controls and educate employees on cyber risks. Cyber insurance is an insurance product designed to help businesses hedge against the potentially devastating effects of cybercrimes such as malware, ransomware, distributed denial-of-service (DDoS) attacks, or any other method used to compromise a network and sensitive data. Cybersecurity Skills Shortage: The evolving threat landscape is leading to a shortage of cybersecurity professionals, with an estimated gap of 3.5 million globally. 16. Future growth: Forecasts suggest that cyber insurance will grow into a $20 billion industry by 2025. At the same time demand for cyber insurance has been increasing, supply has been tightening, as insurers and reinsurers take a step back and reevaluate their risk appetites. Today, companies are more aware of their cyber risk and are looking at the insurance market to mitigate that risk. 4. Ultimately, firms who do not provide the proper documentation and/or do not have the required controls in place may not be considered for coverage altogether or may incur higher premiums and/or lower coverage limits to account for their perceived added risk. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. The cybersecurity service provider Gartner estimates that, by 2025, 60% of companies will deem cybersecurity to be a key component in their IT procurement evaluation process. Despite hard conditions in the market, Robinson encourages agents and brokers not to approach cyber insurance with a negative lens. targeted attacks on particularly lucrative extortion targets like pipelines, is not the only risk and that attacks on smaller and medium-sized government service providers or companies are also possible. Cybersecurity, Technology Risk, and Privacy, Mutual Funds, ETFs, and Other Investment Companies, Private Equity Sponsors and Portfolio Companies, take the 2022 Aponix Cyber Insurance survey here, The National Association of Insurance Commissioners, stop covering ransomware payments in France, Business Continuity Planning, Cyber Incident Response Planning, and Business Impact Analysis, Payment and Fraud Risk Assessment Services, Penetration Testing and Vulnerability Assessments, Newly Discovered Phishing Campaigns Evade Anti-Malware Systems. Organizations in and outside of Ukraine have faced various cyber threats, including large-scale DDoS attacks, heightened malware activity, targeted phishing campaigns, disinformation operations and attacks on cyber-physical systems. First-party cyber coverage protects your data, including employee and customer information. Cybersecurity must be integrated into software, system design, coding and implementation. However, the heightened cyber risks and exponential growth of ransomware attacks in particular over the last year has led to a hardening of the marketplace. While not all cases of FFT involve compromised email accounts, it's estimated that . Businesses of all sizes should have backup and disaster recovery solutions in place along with incident response plans to protect their data from ransomware attacks. Insurtech Insights is worlds largest insurtech community, connecting industry executives, entrepreneurs and investors. 12 Insurance Industry Trends for 2022. Munich Res current Global Cyber Risk and Insurance Study shows that the proportion of decision-makers who are seriously worried about potential cyber-attacks on their companies has increased significantly to 38%, compared with the previous years figure of 30%. Axis: There was a 404% increase in ransomware demands from The total global economic loss due to cyber-crime is difficult to estimate. In other words, companies that aren't proactive about cyber risk management will not be considered insurable going forward. Requiring multi-factor authentications (MFA) for remote access to networks is the big thing that the insurance industry got in lockstep with over the last few years.. The sustainability of the cyber insurance market can be further improved with better resilience and innovative coverage of residual risks. Recovery and replacement of lost or stolen data. Cybersecurity Trends in 2023. Do I qualify? With all the data and scores at their disposal, insurers are able to quantify their own risk, too, and make better-informed decisions as they navigate the increased demand for their services. By contrast, in a cybersecurity context, attacks can have a snowball effect, with stolen data sold and circulating on the dark web for years. RPS data found that fraudulent payments and social engineering fraud among small to medium-sized enterprises made up more than 50% of claims between January and August 2022. According to The National Association of Insurance Commissioners (NAIC), the number of written cyber insurance policies in force increased by 21.3% from 2019 to 2020.