Many U.S. cyber insurers dramatically increased their rates in 2021, alarmed by increased cyberattacks that struck companies worldwide and drew the attention of national governments. Data from regulatory filings and collated by rating agencies shows that among the largest insurers, direct written premiums rose a whopping 92%, while direct loss ratios fell slightly.
Insurers significantly increased premiums for cyber coverage throughout 2021, as a string of high-profile attacks and government action helped boost demand for products, data collected by industry bodies shows. Analysts say the increase primarily reflects higher rates rather than insurers expanding the amount of money they are willing to cover.
Cyber insurers are also taking a tougher line on would-be clients, demanding security measures such as multi-factor authentication and more sophisticated endpoint protection, brokers say.
Although insurance qualification standards vary depending on the industry and the organization’s size, providers will typically look at a company’s internal controls to determine whether they want to offer coverage. Like many other forms of insurance, the better controls your company has, the better rates you will receive. Examples of cybersecurity controls include:
- Data encryption and backup
- Continuous vulnerability testing and remediation
- Employee security awareness training
- Patch management
- Anti-malware defenses
- Wireless device control
Is Your Business Protected?
Although cybersecurity insurance is a nice safety net, most companies never want to use it. Studies show that many small and medium-sized businesses won’t recover from a data breach, and those that do will have to overcome severe setbacks.
Organizations need to determine whether they have the breadth of knowledge necessary to implement their own controls or whether they can acquire the right internal expertise. If the answer to both is “no,” outsourcing to an MSP is the right move. Contact Yeo & Yeo Technology to learn about our managed services.
Information used in this article was provided by our partners at SentinelOne and KnowBe4.