The cybersecurity insurance market has grown exponentially in recent years, and it’s only expected to continue expanding. In fact, by 2028, t-he market is expected to be valued at a staggering $26.24 billion. It’s clear that as cybercriminals become more adept, businesses of all types are opting for more financial protection against the impacts of cyberattacks.
However, just as the market is growing, there are also more governmental and public efforts to tighten regulations surrounding cybersecurity insurance. These endeavors aim to help insurers and companies better understand risk management in the face of new cyberattacks. They also strive to outline what should be included in insurance policies.
To understand where cybersecurity insurance coverage stands today, check out these top trends the market is currently facing.
Top Four Cybersecurity Insurance Trends to Look Out For
Perhaps the most notable trend in cybersecurity insurance coverage is the jump in premium costs. In 2021, premium prices grew by 74% alone. The rise in premiums is due to the greater demand for cybersecurity insurance as more organisations face new and evolving cyberattacks. To combat high-cost premiums, many businesses are taking more preventive measures to avoid possible attacks. For instance, companies are undergoing cybersecurity awareness training and implementing stricter security controls in their systems.
Greater Emphasis on Cybersecurity Readiness
As the number of claims filed rises, so does insurers’ interest in a company’s risk history. [AM4] After all, insurers want to avoid hefty payouts. In response, insurers are requiring businesses to increase their cybersecurity readiness by answering more questions and completing more documentation on their risk management history. For example, insurers are asking businesses about their incident response plans, prior history with breaches, and whether they’ve undergone any risk evaluations of their current cybersecurity.
Deeper Scrutiny of Vendors
As part of risk management, many insurers are taking a deeper look into businesses’ vendors. Insurance companies want to know how much access these vendors have to a company’s network and what privacy and security protocols they have in place. Vendors who have access to critical, private information have a greater risk of exposure if they are not following the same strict practices as the organization.
More Involved Government Regulation
Lastly, governments are becoming more involved in cybersecurity insurance regulation. This is largely due to the vast increase in cyberattacks, particularly ransomware, malware, and phishing. In the United States, more bills and resolutions are being introduced to provide a framework for addressing cybersecurity insurance coverage policies. Similarly, on a global scale, the European Commission has proposed new regulations that call for regular maturity assessments and plan implementations around cybersecurity.
Securing Cybersecurity in an Ever-Evolving World
With cybersecurity, businesses have two ways to optimise their efforts. The first is to take preventative measures by developing a risk management strategy and identifying and addressing security vulnerabilities in their system. The second is to examine cybersecurity insurance options. While costs are increasing, the demand for cybersecurity insurance coverage is justified. Cybercriminals will only get smarter, faster and stronger at breaching systems and causing financial disasters. At Logix Consulting, we’re here to help you with both processes. If you’re looking to learn even more about all things cybersecurity, check out more of our blogs in our resources section.