Cyber insurance premiums are decreasing worldwide as businesses enhance their defenses against cybercrime, despite a rise in ransomware attacks, according to a new report from insurance broker Howden. The report marks a shift in the cyber insurance market following a surge in premiums during 2021 and 2022 driven by pandemic-related cyber incidents.
The market has experienced a notable turnaround, with double-digit price reductions reported for 2023 and 2024. This decline is attributed to improved cyber hygiene among insured businesses, including basic security measures like multi-factor authentication (MFA), which has played a crucial role in preventing or mitigating the impact of cyber-attacks.
Why It Matters: Understanding the current trends in cyber insurance premiums and the factors driving these changes is essential for businesses aiming to protect themselves against cyber threats. As cybersecurity continues to evolve, there is greater importance put on continued investment in cybersecurity measures and the potential for growth in the global cyber insurance market.
- Enhanced Security Measures: The report credits measures like MFA, which is akin to “locking the door when you leave the house,” for significantly reducing data breaches and insurance claims. Companies are also investing more in comprehensive IT security and staff training.
- Ransomware Attacks: Despite the drop in premiums, ransomware attacks have risen by 18% in the first five months of 2024 compared to the previous year. Hackers encrypt data and demand cryptocurrency payments for the decryption key, leading to significant business interruptions.
- Geographical Insights: While the U.S. remains the largest market for cyber insurance, Europe is expected to see the fastest growth in the coming years due to currently lower penetration levels. Smaller firms, however, still lag in purchasing cyber insurance, often due to a lack of awareness.
- Business Continuity: Improved backup systems, such as cloud services, are helping businesses reduce the costs associated with cyber attacks. Effective backup strategies are crucial in minimizing downtime and financial losses during ransomware incidents.
Go Deeper -> Cyber insurance rates fall as businesses improve security, report says – Reuters
