Dramatic spike in ransomware leading to long-anticipated hardening cyber market.
The Cyber Market is Finally Hardening
Cyber Insurance Companies Interviewed by Rough Notes
Cyber insurance companies recently sat down with Rough Notes, the oldest historical insurance industry publication, to discuss the state of the “hardening” cyber insurance market. The shift from in-office to remote work environments has lead to a barrage of attacks from foreign hackers, and in turn, increased losses for carriers. Cyber insurance companies on average are hardening their rates by 10% – 15%. “There was 10 years of change in 10 weeks in terms of the way people do business,” says Anita Byer, president of Setnor Byer Insurance & Risk Byer.
According to Distinguished Programs underwriter Chris Larson, “The nature of claims is not changing because of the pandemic, there is just more frequency of losses.” This spike can be attributed to the weakness of employee’s home network security versus the strength of in-office networks.”
Ransomware is getting out of control in 2020, cyber companies report.
Security Magazine reports a 667% increase in phishing attacks & CoveWare reports the average ransom demand increase to $111,605. To protect your business, please reference the following FTC & FBI ransomware warnings.
While it remains easy to place coverage for small-mid sized businesses, the market is beginning to harden. Business and brokers alike should prepare for an increase in premiums across the board, even for companies with a spotless record when it comes to cybersecurity and hack attacks.
Michael Costello was recently featured in Rough Notes, offering his $0.02 on the state of the market and Evolve’s approach to broker education. “The biggest issue cyber insurance faces is still the complexity surrounding coverage, as exposures and coverages change rapidly and competing insurers call the same coverage by different names.”
“Businesses now understand they have cyber exposures, as they have either had a hacking scare or seen their competitors experience attacks,” says Costello. “In response, we focus on educating retail brokers to explain cyber exposures to any business in any industry in under one minute.”