Businesses looking to renew their Cyber Insurance in the coming year should expect higher premiums and could see reduced policy terms. How much? Some companies could see their premiums double by 2023.
Pandemic-related changes such as the shift to remote work and the dramatic rise in both the frequency and severity of cyberattacks have forced insurance companies to increase their rates for this vital coverage.
Some companies are seeing premiums rise as much as 300% if they have not implemented mitigation strategies to reduce their risk of being impacted by cyber attacks. Companies in education, healthcare, construction, and manufacturing as well as public sector organizations are seeing the biggest increases.
“While this market dynamic developed quickly, within a matter of months, long-standing underwriting issues in this market, as well what had been a growing mismatch between exposures and underwriting, helped to create the current situation and the imbalance between coverage supply and demand,” said Steve Robinson, Risk Placement Services (RPS) Area President and National Cyber Practice Leader in a recent report (here).
Criminals have found success with ransomware at the expense of all types of businesses and their insurers, which is a primary factor in the increase. Insurers have changed their underwriting standards and increased pricing to account for the changes. While those changes will help better balance the risks of underwriting Cyber Insurance, a report published by S&P Global Ratings suggests that companies should expect to see insurers continue to tighten coverage and raise rates for the next few years.
Those organizations looking to save money on rising Cyber Insurance rates can take steps to lessen the burden by improving cyber security and by using a Cyber Insurance expert. For example, implement multi-factor authentication wherever it is relevant. Robinson called it one of the most effective ways companies can head off cyber extortion attempts.
Also, use a Cyber Insurance expert to help find comprehensive coverage for your organization at the most competitive price. Remember – the least expensive policy is not always the best.
eSpecialty Insurance is your specialty insurance expert. We have developed a streamlined marketplace to provide multiple proposals from a range of competitive insurers, along with expertise to help you evaluate your exposures and choose the best combination of comprehensive coverage and price. Try our online Cyber Insurance Quoting Portal for immediate Cyber Insurance pricing. We look forward to working with you.