Attackers often plan their attacks for the long term and maximise the impact by targeting supply chains and industrial or automated processes. We continue to see ransomware attacks as the number one cyber threat. 3Segal, Edward. In the analogue world, it took 15 years for the provision of safety belts in German cars to be made mandatory, and many more years for them to be accepted and fastened by users in every-day life. This trend is concerning, because the level of technical understanding in the insurance community needs to increase if organizations are to be properly informed of the cause-and-effect impact of policy revisions such as these. The once-common 60-day window has dropped to 30 days from renewal for many markets, for two reasons: 1) staffing inadequacy is a real problem, as demand has outpaced many carriers' ability to keep up; and 2) the constantly evolving pace of new threats means carriers want as much time as possible to account for the next discovered systemic vulnerability. . It falls on companies to turn to security basics to try to keep cyber insurance rates in check. Addressing the causes of burnout requires a top-down approach that better aligns security teams with the rest of the business. This comes from our 2022 Cyber Insurance Market Trends Report, based on a survey of 400 decision makers in cyber insurance across the US and UK. In 2021 alone, the Conti group of hackers the most lucrative service provider extorted or earned at least US$ 180m from victims (Chainalysis). Rather than cautiously optimistic, like Marsh, Manyemhas a more cautious view of the market. We are also witnessing both vendor- and event-specific exclusions and additional underwriting scrutiny tied to specific software platforms connected with widely reported exploits, and vendors who are associated with nation states that are alleged to be less than U.S.-friendly. Examples include the automotive cybersecurity standard ISO/SAE 21434, which will apply compulsory for all new cars from July 2022, and IEC standard 62443 on cybersecurity in industry and automation. 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. Cybersecurity Ventures estimates global spending on cybersecurity in 2021 to have be US$ 262.4bn in 2021. Digital attacks on energy providers, food providers, hospitals, administrative bodies and other areas of critical infrastructure reached a new peak last year. David has been actively involved in founding several industry alliances and expert groups across multiple regions. Surrey "Biden Administration Takes New Steps to Combat Ransomware Attacks," Forbes, September 21, 2021. Ransomware claims typically trigger multiple insuring agreements in a cyber insurance policy beyond extortion, including business interruption, data restoration, forensics, legal and notification expenses, when the claim also involves unauthorized access to personally identifiable information. This process continues into 2022. The European Union Agency for Cybersecurity (ENISA) recognised and analysed the increased risk from cyber-attacks on or via supply chains in its Threat Landscape for Supply Chain Attacks report. As we entered 2022, it appeared that the new year would not only rival, but perhaps surpass, the headlines generated in the previous 12 months. The loss ratios of 2021 have continued to put pressure on available capacity for cyber insurers, both domestically and abroad. We use cookies to ensure that we give you the best experience on our website. Further, one information security firm recently noted that the exfiltration of data associated with ransomware attacks increased by more than 82% in 2021.1, The threat of data release and distributed denial of service (DDoS) attacks has added complexity and expense to ransomware claims, and insurers took notice. 6Miller, Susan. 2022 Cyber Insurance Market Trends Report thank you, 2022 Security Leaders Peer Report thank you, Continuous Controls Monitoring for Enterprise Security, Metric of the Month: On-demand panel discussion, Panaseers 2020 Financial Services Security Metrics Report thank you page, Panaseers 2020 GRC Peer Report thank you page, The CISOs guide to: Creating an effective ransomware board report Thank you, The Seven Sins of Security Metrics- thank you page, Webinar: Continuous Controls Monitoring What to measure, Webinar: The Time is Ripe for Proactive Security, Whitepaper: 451 Research Pathfinder Report The Time is Ripe for Proactive Security thank you page, Data Protection Statement GDPR Compliance, Briefing: Modern CISOs use Data to Improve Enterprise Cyber Hygiene and Reduce Risk, Forrester report: Misplaced confidence in security controls is putting organisations at risk thank you, The case for CCM: mergers and acquisitions thank you page. At the same time the vast majority of C-Level respondents confirm that adequate cyber security is still an issue within their companies. The implementation of adequate cyber security requires increased investment. Insurers have moved back into pre-2017 mode, most requiring that callback procedures are in place before agreeing to offer limits for social engineering/cyber deception. Global Cyber Risk and Insurance Survey 2022, More action required for higher cyber resilience, Up-to-date information - directly to your mailbox. Public awareness of digital vulnerabilities has heightened with the growth in number of serious attacks and losses. Cyber product offerings reached significantly more decision-makers in 2022 than in the previous year (42% received an offer, compared with 34% in 2021). 9"How the Russian/Ukraine War May Lead to an Explosion in Ransomware Attacks," Coveware blog, March 25, 2022. Others, however, are not as optimistic. In view of increased vulnerabilities, it is crucial for companies and organisations to have a clear understanding of the threat landscape and ones own weaknesses. Demand for cyber insurance has grown greatly in recent years. If they want cyber insurance coverage, they have to comply with minimum standards which are far more in-depth than before. This is also evident from Munich Res global Cyber Risk and Insurance Survey 2022. 2Hostetler, Baker, Theodore J. Kobus III et al. This is an encouraging sign, although we have thus far only seen these results in isolated circumstances and don't expect it to become a trend any time soon. A dynamic cyber insurance market requires several perspectives. The proportion of decision-makers surveyed who were still undecided about arranging cover remained unchanged at 35%. Making ransom demands is not the sole motivation of attackers of critical infrastructure. As discussed in our 2021 RPS Cyber Market Outlook, ransomware led the way last year in cyber insurance claims frequency and severity for most insurers. The risk situation remains extremely dynamic. For example, ransomware programs can be rented on the dark web for US$ 40 a month. With respect to the scope of cover under policies, respondents would like coverage to extend to data recovery services in an emergency, a 24-hour hotline, legal advice and forensic services. "2022 Data Security Incident Response Report," gated PDF, April 7, 2022. The isolation that Russia now faces has the potential to create a perfect safe haven for cyber criminals.9. According to Cybersecurity Ventures, a ransomware attack occurred every 11 seconds in 2021. The data also shows what could be done to ensure the cyber insurance market remains attractive for enterprises, such as improving data transparency and creating shared standards for measuring security posture. 8 Information sharing between the private and public sector will continue to be critical in the fight against cybercrime of all varieties. We have also witnessed a move by many carriers to shortened timelines for quote. Cybersecurity authorities in the USA, the UK and Australia are also seeing a worldwide increase in the threat to critical infrastructure. This act establishes new cybersecurity reporting requirements to the Cybersecurity and Infrastructure Security Agency (CISA) no later than 72 hours after a cyber incident and within 24 hours after making a ransom payment. "Top FBI Official Advises Congress Against Banning Ransomware Payments," The Hill, July 27, 2021. Insurers understand that increasing rates alone will not ensure the cyber insurance market's sustainability. According to ENISA, the number of supply chain attacks quadrupled in 2021 compared with 2020. For the government in particular, its terrorism risk insurance may only kick in if an attack can be clearly defined as "terrorism. Insurers will be focusing even more strongly on the targeted analysis and use of data. 2022 Risk Placement Services, Inc. All Rights Reserved. Only then can they protect themselves through targeted risk management. 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. The threats are evolving constantly, he said. 135 Madison Ave, Attackers rely on a mix of tried-and-tested methods as well as their own expanding repertoire of tactics and approaches. For the insurance industry, it is therefore vitally important to continue to tailor the range of cyber products to customer requirements and increasing digital dependencies. The general consensus among experts appears to be that criminals and state-motivated actors will continue to exploit the potential of these attack vectors and the criticality of supply chains. Demand for cyber insurance is currently growing more steadily than the capacity on offer. The rate increases are still terrible, said, Marsh officials are optimistic the cyber insurance industry, as it matures, can level off. Capacity restrictions have been felt in additional ways, including a temporary pause in new business writings from some markets and the elimination of $5M limits by others, in addition to significant de-risking in more loss-sensitive sectors of business such as public entity, education and manufacturing. Within the legislation is the Cyber Incident Reporting for Critical Infrastructure Act of 2022. As cyber threats continue to evolve, so too do underwriting techniques and the coverage grants found in cyber insurance policies. 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. For admitted coverage, the increases rolled out more incrementally throughout the U.S. as state filings were reviewed and subsequently approved. Social engineering and wire fraud losses have moved to the forefront of claims frequency in Q1. 7Miller, Maggie. Cyber insurance is fundamental for the successful digitalisation of the economy. Interestingly, however, in stark contrast to the early signs that January showed us from mid-sized to larger organizations, RPS's small business sector of clients reported a 35% reduction in the frequency of ransomware-related events in Q1 2022. The top six ways ranked, BlackCat ransomware claims attack on European gas pipeline, A Cyberattack Illuminates the Shaky State of Student Privacy, Threat actors shifting tactics as Microsoft blocks, unblocks and reblocks macros, Mandiant red team breaches OT servers to mimic crime group techniques, AWS wants to be an enterprise security strategy advisor, SEC's cybersecurity proposals: Why visibility into risk is at the heart of it. As organizations continue to increase their reliance on internet connectivity for every part of their operations, these attacks impose crippling disruption to operations, finances and even physical safety. More so than ransomware, these types of claims are often highly preventable with the most basic, non-technical checks and balances in place. Insurance companies can probably control their losses through limits, deductibles, reinsurance [and]so on, so they have strategies to control their financial losses, Manyem said. The rate increases are still terrible, said Sridhar Manyem, director, research at AM Best. Exacting cybersecurity standards must be defined and complied with by insurers and exposed industry sectors alike. If 2018 brought about a furious stretch of cyber insurance product innovation, 2022 is ushering in a retraction in terms and conditions at a similar pace.
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