"Cyber Insurance Price Hike Hits Local Governments Hard"

State and local governments are now required by insurance companies to have updated software and firewall protections, a backup system, cyber training for staff, vulnerability testing, and multi-factor authentication (MFA), including for remote work. Horry County, South Carolina, officials were taken aback earlier this year when they learned that their cyber insurance premium would be increasing from $70,000 last year to around $210,000 this year. They discovered that if they could not satisfy the insurance company's requirements and demonstrate they had the robust controls needed to protect and defend themselves against cyberattacks, they would not be able to renew their $5 million policy. Many local governments and states, as well as private companies, are in the same boat across the US. They are learning that their cyber insurance premiums have skyrocketed and that they must adhere to stricter guidelines in order to obtain coverage or renew their policies. According to Alan Shark, executive director of the CompTIA Public Technology Institute, cyber insurance used to be affordable, but times have changed, and insurance companies are raising rates dramatically, raising the bar, and making it more difficult to obtain insurance. As a result, some local governments may no longer be able to get it. Officials in the insurance industry say the higher premiums for both public and private organizations are the result of increased demand for coverage amid more frequent and costly cybercrime incidents, particularly ransomware attacks. Therefore, insurers have had to pay out more, forcing them to raise premiums and tighten eligibility requirements. Some companies have also reduced coverage caps or limited the number of policies they write. For example, American International Group, one of the country's largest writers of cyber insurance, announced that rates for its clients had increased nearly 40 percent globally and that it was tightening policy terms to address rising cyber losses. According to a report by Fitch Ratings, a credit rating agency, the number of cyber insurance claims reported in the US has increased by 100 percent per year over the last three years. Insurers paid out 8,100 claims in 2021. Loretta Worters, a spokesperson for the Insurance Information Institute, an industry trade group, said insurers are becoming more diligent during the application process about which safeguards and technology an organization uses to protect itself against cyberattacks in order to reduce risk and potential losses. This article continues to discuss changes in cyber insurance and their impact on state and local governments. 

GCN reports "Cyber Insurance Price Hike Hits Local Governments Hard"