"Cyber Insurance Industry Grapples With Evolving Security Risks"

The growing frequency and severity of cyberattacks are increasing the demand for cyber insurance. However, a recent report from the US Government Accountability Office (GAO) reveals that insurers are struggling to adjust their policies to keep up with new cyber risks. According to the GAO report, the number of insurance customers who have opted for cyber insurance grew from 26 percent in 2016 to 47 percent in 2020. This increase in cyber insurance demand has also led to a rise in insurer costs, as indicated by GAO's survey of insurance brokers. Most of them revealed that their clients' insurance premiums rose between 10 and 30 percent in later 2020. GAO pointed out that the rapidly growing level of cyber risk is creating uncertainty surrounding the affordability and availability of cyber insurance policies, especially for healthcare, education, and other high-risk industries. Cyber risk will continue to evolve as technology and cyberattack techniques change, making it increasingly difficult for insurers to underwrite coverage. Challenges faced by cyber insurers include a lack of sufficient comprehensive data on cyber losses to quantify risk accurately, lack of clarity surrounding security-related terms for cyber insurance policies, aiding in ransomware payouts, and more. The GAO report also highlighted how insurers are becoming more selective when offering coverage to industries considered high-risk, such as healthcare and education. Insurers have been increasing coverage prices to reduce cyber coverage limits for riskier industry sectors that face more significant damage from ransomware attacks. This article continues to discuss findings shared by the GAO report regarding cyber insurance challenges.

Decipher reports "Cyber Insurance Industry Grapples With Evolving Security Risks"