Cyber Insurance Premiums Decreasing Globally as Businesses Improve Cybersecurity
According to a report from broker Howden, cyber insurance premiums are decreasing globally as businesses improve their ability to mitigate losses from cyber crime. While ransomware attacks are on the rise, premiums have been dropping over the past year. The cyber insurance market saw double-digit price reductions in 2023/24 due to added security measures such as multifactor authentication that protect companies’ data and reduce insurance claims.
Sarah Neild, head of UK cyber retail at Howden, emphasized the importance of basic cybersecurity practices like multifactor authentication, comparing it to locking the door when leaving the house. She also noted that companies are investing more in IT security and staff training, making them more resilient to cyber attacks. Insurers are increasingly willing to offer cyber insurance, contributing to the price decreases despite the rise in attacks.
Ransomware typically involves encrypting data and demanding cryptocurrency payments for their release. While global ransomware attacks decreased after Russia’s invasion of Ukraine in February 2022, recorded incidents rose 18% in the first five months of 2024 compared to a year earlier. Business interruption is a common cost after a cyber attack, but companies can reduce these costs by implementing better back-up systems, such as using cloud providers.
The majority of cyber insurance business is in the United States, but the growth in the $15 billion global cyber insurance market is expected to be fastest in Europe in the coming years, as penetration levels are currently lower in that region. Smaller firms are less likely to buy cyber insurance due to a lack of awareness of cyber risks.
