Another recent underwriting requirement introduced by cyber insurers is the use of supplementary application forms specifically addressing ransomware controls. Even with improvements from the use of cyber risk assessment tools and upgraded application forms, the vulnerabilities exploited in these attacks would likely never be caught by underwriters. InSights The new, more specific policy language provides affirmative cyber terrorism coverage and works in the insureds favor. The way in which cyber risk assessment output is applied to the underwriting process has evolved significantly. In short. like the professionals at ProWriters are experienced in the ever-changing risks associated with cyber coverages. He holds a BSc and Master of Laws degree from Aarhus University in Denmark. have a unique ability to find risk-management-oriented solutions that limit exposure and grow your revenue. Cyber insurance typically covers a common set of scenarios and impacts, including: Cyber insurance can also support and defend your organization from any legal liability arising from those affected by the incident, such as customers, employees, vendors, and business partners. A Fitch Ratings report says ransomware losses have contributed to an increase in U.S. (stand-alone) cyber loss ratios from 34% in 2018 to 73% in 2020. Regardless of whether such attacks exploit zero-day vulnerabilities or use sophisticated malware hidden in soft-ware updates, the insurance industry will always have one fundamental problem: the twelve-month renewal cycle of most insurance policies. You may opt-out by. The SolarWinds breach is already one of the most significant cybersecurity incidents ever. As a result, insurers are revisiting their policies and enhancing their risk assessment processes. Fines and penalties imposed by regulators, Credit and identity monitoring services for those impacted by a breach, The latest tactics used by ransomware groups, BitSights analysis of data on hundreds of ransomware events, Best practices to protect your organization. Show/Hide actively work to increase your profits through specialized methods developed over years of experience. Improved cyber risk modeling capabilities are supporting insurers work to more accurately determine the pricing and reserving needed for future catastrophic events. Underwriters have unique knowledge of risks and exposures and use years of experience to finely hone their skills. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful. Increased access to these benefits is one of the top reasons brokers cite when they decide to partner with a cyber insurance underwriter. As a result, cyber insurers are tightening their underwriting guidelines and clarifying coverage intent in their policy language. By design, underwriters specialize in protecting insurance agents, brokers, and companies from non-profitable business opportunities. The must have controls typically include the following: Ransomware supplements are, as they say, supplementary. BitSight Security Ratings are a great way to prove your cybersecurity protection efforts to a cyber risk insurance provider. The ransomware epidemic has forced insurers to make necessary upgrades to their question sets and increasingly move away from the binary answer format that often leads to limited insights. Legal | This will give them the opportunity to ask questions about any of the responses on the application or areas of concern. Standard lines of insurance, such as property, general liability, and workers compensation, have long incorporated risk control services that help reduce both the frequency and severity of loss. All Rights Reserved. Expertise from Forbes Councils members, operated under license. But underwriters, like the team at ProWriters, do more than save you upfront costs. And as wi 2022 BitSight Technologies, Inc. and its Affiliates. According to a report from Deloitte Financial Services, underwriters can be the difference between 10% and 20% annual growth for insurance providers. Jacob Ingerslev is the Head of Cyber Risk at The Hartford. Additionally, 50% of global cyber insurance gross written premiums are underwritten by BitSight customers including AIG, Chubb, and Hartford. Even a comprehensive penetration test covering all known attack tactics, techniques and procedures available at the time of the test only provides a snapshot of the security posture. While some ports are necessary for regular internet facing operations, such as web applications, unused ports left open to the internet will increase the risk of attacks. If youre getting ready to purchase cyber insurance or renew an existing policy, heres how you can secure the right coverage. As a result, the market is experiencing significant changes in underwriting approach and pricing of risk, as insurers continue to adapt to these challenges. Insurers now increasingly use specific identified vulnerabilities to guide pricing, manage limits, set subjectivities relating to specific remediation requirements, and in some cases decline to offer a quote altogether. Sublinks, Show/Hide Hiring a cyber insurance underwriter comes with a long list of benefits. Heres what you need to know to prepare if youre purchasing cyber insurance for the first time or headed into a renewal in 2020. The SolarWinds and Microsoft Exchange Server attacks have brought added challenges on top of issues already facing cyber insurers due to ransomware. The underwriting talent at ProWriters is backed by decades of experienceand heres how those services can help you. By checking this box, I consent to sharing this information with BitSight Technologies, Inc.toreceive email and phone communications for sales and marketing purposesas described in our. The scope of BI coverage had rapidly expanded in recent years to include outages caused by vendors (contingent or dependent BI) and unexplained or non-malicious events (system failure). Ratings and analytics for your organization, Ratings and analytics for your third parties. Weve seen many of our key cyber insurers implement at least one or a combination of the following to get more details and better understanding on a companys due diligence process: If the companys responses are not favorable, the outcome could be one or more of the following: In order to get a better outcome in todays cyber insurance placement or renewal, invest more time into the process. Cyber insurers have clearly shown an intent to reduce ambiguity in their policies. Underwriting is a unique component of the insurance industry, and taking advantage of professional underwriting services streamlines the cyber insurance underwriting process, saving you a significant amount of time and money. At the same time, or as a consequence, cyber insurance premiums increased by 33.5% in 2020 alone, the extent of coverage is reduced, and insurers are increasingly relying on reinsurance. One of the immediate consequences of a lack of measurability is the creation of insurmountable obstacles in tracking the evolution of the security posture over time. The Hartford shall not be liable for any direct, indirect, special, consequential, incidental, punitive, or exemplary damages in connection with the use by you or anyone of the information provided herein. cookie settings to include "Targeting Cookies" to view this form: All views expressed in this article are the authors own and do not necessarily represent the Improved underwriting information gathering. As the World Bank Group explains in its Primer Series on Insurance, underwriting is an art and not a science. Underwriters have a unique ability to find risk-management-oriented solutions that limit exposure and grow your revenue. Curbing cybercrime requires global cooperation and coordination, which may or may not ever take place. Now, underwriters are asking for more details to better understand the risk they are insuring. Subscribe to get security news and industry ratings updates in your inbox. He joined The Hartford (through Navigators Group) in February 2017 and is responsible for the Cyber Risk and Technology Errors and Omissions product suite, underwriting strategy, and incident response solutions, and is leader of the enterprise Cyber Risk practice. Such services have been available for the past few years in cyber insurance, but the uptake rate has been fairly limited for a number of reasons. choose ProWriters to boost their business and their bottom line. At the same time, underwriting talent is becoming harder to find; by some estimates, there is a 40 to 50% shortage in North America alone. Why BitSight? In short, underwriters actively work to increase your profits through specialized methods developed over years of experience. CVEs are publicly disclosed software vulnerabilities, which are recorded in a database maintained by the MITRE Corporation. Sublinks, Show/Hide Dynamic and continuous cyber insurance underwriting evaluation to adapt to today's cyber reality. I believe harnessing these new capabilities could revolutionize cyber insurance underwriting. To meet the fast-rising executives' interest in cyber insurance and cover the inflated cyber risk from insurers' and reinsurers' perspectives, a shift in thinking should focus both sides on risk prevention, improved visibility and quantification during the risk assessment phase. He started his 20-year insurance career in the Scandinavian insurance market underwriting Technology and Life Science risks and has held leadership positions with CNA Financial Corporation and the Chubb Corporation in both the U.S. and Europe. Keeping this cookie enabled helps us to improve our website. Its just one of the reasons insurance brokers choose ProWriters to boost their business and their bottom line. This article provides general information and should not be construed as specific legal, risk management, or insurance advice. It can also measure the extent and effectiveness of automated mitigation and attacks maximum reach. Visit our course catalog for more information on our cyber insurance training. The underwriting process in cyber insurance has changed significantly over the past 12 months and two major factors are at play. Please provide your consent for cookies by using the Cookie Settings link below: Woodruff-Sawyer & Co. Insurance Services | Risk Management | Employee Benefits. We now commonly see underwriters delving deeper into the details around the specific practices, controls, and protocols in place to prevent or mitigate specific types of threats, such as ransomware attacks. These applications are increasingly mandatory for organizations to complete when seeking cyber coverage or renewal of an existing policy. These tools, typically cybersecurity rating applications, collect information from a number of different data sources, including vulnerability scans, threat intelligence, and cybersecurity research, and they use a proprietary algorithm to aggregate the data into a score, rating, and/or probability of loss. Following these recommendations will set the stage for a more favorable outcome such as better rates and coverage in a cyber market where risks and claims continue to increase and evolve. Partnership And Protection: SMEs And MSPs, Africa's Chaotic Legal And Regulatory Cybersecurity Landscape Requires Harmonization, Why Great Technology Innovators Think About Platforms, Three Critical Risks Plaguing The Enterprise In The Age Of Digital Interconnectivity, The Four Biggest Obstacles To Strategic Planning, Crossing The Chasm Between S&OP And Autonomous Planning, What The SMB Loan Fraud Problem Means For API-Based Technology. Because cookies are blocked, we are unable to display this signup form. These tools allowed them to not only evaluate the level of cyber exposure more accurately but also to improve the quantification and pricing model. Indicates status vs. compliance requirements. Interested to learn more about the latest developments in cyber insurance? The three flaws in classic security posture evaluation. Why BitSight? Both were advanced persistent-threat attacks, and they amplify the limitations of cyber underwriting processes. Regardless of whether attacks exploit zero-day vulnerabilities or use sophisticated malware hidden in software updates, the insurance industry will always have one fundamental problem: the twelve-month renewal cycle of most insurance policies. Designed and built by Studio Praktik, Read more about the minimum requirements demanded by cyber insurers, Interested to learn more about the latest developments in cyber insurance? Your list should include relevant data points that prove your organizations commitment to sound cybersecurity. Its just one of the reasons insurance. Underwriters save you both time and money, making your job easier. To learn more about ProWriters industry-leading underwriting services, connect with an expert today. 3. While the industry continues to expand cyber services offered in conjunction with the policies, such as incident alerts during the policy period, these have little impact since inaction is not sanctioned. Innovative coverages are no longer being thrown in to cyber policies. Increased access to these benefits is one of the top reasons. Whether you are placing cyber insurance for the first time or headed into a renewal, preparation is going to be key to meeting the rigorous demands of the insurers. The full format application forms that have been used in cyber insurance since its infancy are still part of the underwriting process and they too have improved in their scope and design. Today, modern cyber risk management can enable an accurate and comprehensive framework that: 2. We believe such metrics, as they convey the state of a company's security posture in an easily understandable format, could greatly facilitate the cyber insurance underwriting process. Establishing a quantified security posture baseline on which to base the initial quote. Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings. Tweets by @roughnotesco Insurers are now communicating more explicitly about what types of events can trigger a cyber policy, and what losses the policy pays out. The second is claims under new and evolving consumer privacy legislation, such as the General Data Privacy Regulation (GDPR), Biometric Information Privacy Act (BIPA), and California Consumer Privacy Act (CCPA). By now the cyber risk awareness gap is closing, and policyholders increasingly understand the benefit of cyber risk control services. Moreover, it does not evaluate the effectiveness of compensating remediation. Insurers want to know that your organization is taking steps to understand and act on these risks. As with all matters of a legal or risk management nature, you should consult with your own legal counsel and other professionals. As cyber insurance products continue to change with a rapidly evolving industry, many insurance brokers, agents, and companies are seeing the benefits of finding an expert partner in the cyber insurance underwriting process. the war exclusion found in most commercial insurance policies, which intends to exclude loss arising out of war, warlike actions, terrorism, or state-sponsored attacks. Sublinks, Show/Hide Underwriting based on accurate, fact-based and quantified data could go a long way toward avoiding a repetition of the current situation where paid claims are three times as high as initial claims, with insurers suddenly hiking their premiums 300% at renewal time through no fault of the insured. Cyber risk assessment tools provide insights into an organizations perimeter security, including two areas of cyber exposure of particular interest to insurers: open port vulnerabilities and CVEs, or common vulnerabilities and exposures. Business interruption (BI) is another area of coverage where we are seeing changes in insurer appetite. like the experts at ProWriters are an important part of that process. Lets now turn our focus to some common approaches were seeing during the underwriting process today. Proceed with completing the application and then offer the underwriters a chance for a follow-up meeting or call. If you become a victim, cyber insurance can cover the cost your business may incur as result of the incident. PwC Cloud and Digital Transformation BrandVoice, How To Earn Cash Rewards For Everyday Spending. Previously, Avihai was the Head of the Cyber Research Team at Avnet Cyber & Information Security. It is, in fact, logical to assume that, as wide adoption of such an approach would harden global cyber resiliency, it would raise the entry-level access to cybercrime and contribute to its reduction. Download our ebook to learn more about: As cyber attacks have become more commonplace and the frequency of claims has grown, the process of cyber insurance underwriting has evolved significantly. When applying for cyber insurance or renewing a policy, preparation can ensure the best outcome. At the same time, underwriting talent is becoming harder to find; , there is a 40 to 50% shortage in North America alone. Resources Before you sign on the dotted line, study your insurers contractual wording to avoid any misunderstanding of what is covered and whats excluded. In a technological landscape where infrastructure is in constant flux due to agile development and its resulting frequent pushing of new deployments, a yearly evaluation based on guesstimates opens the door to failure in uncovering newly introduced risks that will crop up even with adherence to best practices. By finding a qualified cyber insurance underwriter, all of the analytics with respect to risk assessment and policy placement can be handled separately, freeing up resources to focus on high-level tasks like client retention. in-house. 4. On the other hand, even if cybercrime is expanding both in overall size and in attack complexity, emerging technology can limit the risk of successful breaches and, at the same time, increase cyber resiliency in case of successful breaches. Then, vulnerable attack paths will need to be identified for further mitigation in order to help accelerate access to a better security posture. specialize in protecting insurance agents. The cyber insurance underwriting process requires a significant dedication of resources. Focusing on quantifiable and verifiable cyber resiliency is key to enabling cyber insurance underwriters to accurately evaluate the risk over extended periods. On top of this, insurers are bracing for the impact that COVID-19 will have on cyber risks this year. They focus on both prevention and recovery controls; one of the most effective measures to mitigate ransomware attacks is a recent, tested, and well-protected backup. Recent nation-state attacks have further elevated concerns about future cyber-related catastrophe events, and the deterioration of loss ratios due to the increase in attritional losses is adding increased pressure on cyber insurers to adequately model for such events.
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