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It’s a positive sign that shines a light on a volatile market that will face capacity challenges in 2023 due to “increased demand, two-plus years of significant premium increases, more reasonable limits deployment and exit of some players from the market,” according to Steve Robinson (pictured), RPS’s Head of Area and National Cyber Training Leader.
“Carries has essentially raised the barrier to entry for cyber insurance, increasing the information security requirements for companies to qualify,” Robinson said. Insurance business. “Requiring multi-factor authentication (MFA) for remote access to networks has been a big issue that has locked the insurance industry down over the past few years.”
While admittedly a lot of hard work has gone into brokers and their clients, cyber security is an evolving process. Some sectors may also have to work harder to meet cyber insurance requirements.
“As we see rates loosening, we see more industry-specific underwriting,” Robinson noted. “Carriers are a bit more comfortable [with some sectors] Overall we see information security levels in a better place. But they have dropped out of some of the worst-performing industry groups K-12 school districtsor cities and municipalities.”
2023 Trends for Cyber Insurance Market
RPS has identified several themes in the cyber insurance market for the new year:
“Inside-out” underwriting
Sophisticated underwriters use third-party scanning technologies to help detect security weaknesses. They make endorsements around scanned vulnerabilities, and if left unchecked, these can affect organizations’ coverage.
Return of ransomware
Ransomware losses have decreased in the last few months, but they have increased in severity. Ransomware-as-a-service is also on the rise; This is predicted to be the biggest threat facing the internet market in the next few years.
Social engineering fraud
Social engineering attacks This year is more than just ransomware, fueled by a global shift to hybrid work. Social engineering tactics involve using manipulation to gain access to cyber security weaknesses. Data from the RPS found fraudulent payments and social engineering fraud accounted for more than 50% of claims between small and medium-sized enterprises between January 2022 and August 2022.
Increasing internet regulations
Amid changes in the threat landscape, bans on ransomware payments and other cyber-related laws could evolve across the United States. But such actions can have a major impact on public institutions, including At least be prepared for cyber attacks. The public sector, including academia, faces fewer options for risk transfer after skyrocketing claims forced many carriers out of space.
For Robinson, the jury is still out on whether banning ransomware payments will reduce the frequency of attacks.
“Logic would tell you that bad guys don’t attack companies because they don’t have the money to get them. The problem is that indiscriminate attacks like ransomware-as-a-service aren’t always that way,” he said. “No one wants to pay the ransom. But in some cases, it’s Keeping it as an option can be important.
How can brokers and agents navigate the Internet market next year?
The The cyber insurance market is still growing, but according to Robinson, it’s clear that an insurance provider can no longer be a company’s sole risk management strategy. Agents and brokers play an important role in helping clients mitigate their risk and prepare them for the 2023 updates.
Robinson recommends that organizations partner with a third-party evaluator to investigate vulnerabilities in their networks. Communicating with customers will also be key so that they have a change to act on those vulnerabilities and obtain the appropriate level of insurance before applying for cyber insurance.
See those 5 employees who are skipping cybersecurity training? 3 of them will still fail the basic exam. Here’s how agents can help fix this problem. https://t.co/mMwhBdFTfJ pic.twitter.com/Dfh1YkP7MS
— Risk Placement Svs (@rpsins) December 6, 2022
Despite the tough market conditions, Robinson encourages agents and brokers not to approach cyber insurance with a negative lens.
“Of course, we never want our customers to have less coverage than the year before. However, these policies are never priced to account for cyber warfare that comes with armed conflict or massive cloud breaches that can affect millions of cyber policyholders at once,” said Robinson.
“For the market to be viable and sustainable, these necessary changes must occur. It is important for agents and brokers to understand that we are still in the developmental stages, not only in terms of demand and premium, but also in how carriers manage risk and its evolution.”
What are your predictions for the cyber insurance market next year? Share your thoughts in the comments below.
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