Gee, you think? According to the Wall Street Journal, buying cyber insurance is getting trickier as attacks proliferate, which leads to costs rising – dramatically.
The article (Buying Cyber Insurance Gets Trickier as Attacks Proliferate, Costs Rise, written by Cheryl Winokur Munk, hat tip to KnowBe4 for coverage) states that, for many businesses, obtaining or renewing cyber insurance has become expensive and arduous.
The price of cyber insurance has soared in the past year amid a rise in ransomware hacks and other cyberattacks. Given these realities, insurers are taking a harder line before renewing or granting new or additional coverage. They are asking for more in-depth information about companies’ cyber policies and procedures, and businesses that can’t satisfy this greater level of scrutiny could face higher premiums, be offered limited coverage or be refused coverage altogether, industry professionals said.
“Underwriting scrutiny has really tightened up over the past 18 months or so,” said Judith Selby, a partner in the New York office of Kennedys Law LLP.
In the second quarter, U.S. cyber-insurance prices increased 79% from a year earlier, after more than doubling in each of the preceding two quarters, according to the Global Insurance Market Index from professional-services firm Marsh & McLennan Cos. Ouch!
More ouch: Direct-written premiums for cyber coverage collected by the largest U.S. insurance carriers—the amounts insurers charge to clients, excluding premiums earned from acting as a reinsurer—climbed to $3.15 billion last year, up 92% from 2020, according to information submitted to the National Association of Insurance Commissioners, an industry watchdog, and compiled by ratings firms. Analysts attribute the increase primarily to higher rates, as opposed to insurers significantly expanding coverage limits.
One of the reasons that buying cyber insurance has gotten trickier is that companies buying insurance are subject to tight scrutiny of internal cyber practices, said Selby.
Now, insurers aiming to limit their risk are putting corporate security chiefs through lengthy lists of questions about how they defend their companies, said Chris Castaldo, chief information security officer at Crossbeam Inc., a Philadelphia-based tech firm that helps companies find new business partners and customers.
The WSJ article has more on the current challenges for buying cyber insurance. When I covered cyber insurance trends last year, I reported that premium prices were rising as much as 40%. To quote Ron Burgundy, “that escalated quickly!”
So, what do you think? Are you surprised the extent to which buying cyber insurance has gotten trickier and more expensive? Please share any comments you might have or if you’d like to know more about a particular topic.
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