As cyber threats evolve and grow more sophisticated, the cyber insurance market is facing increasingly difficult conditions. In 2022, most policyholders experienced higher premiums due to the rise in both frequency and severity of cyber incidents. Insureds have also encountered coverage restrictions and increased scrutiny from underwriters regarding their cybersecurity practices.
Moving into 2023, industry experts anticipate a more volatile and unpredictable cyber insurance market as difficult market conditions and new entrants add to the challenges. To help businesses navigate the evolving market, here are some tips for cyber insurance buyers:
- Address supply chain vulnerabilities to mitigate nation-state and supply chain threats.
- Expect tightened underwriting standards, with insurance carriers being more selective in insuring businesses and covering certain types of losses.
- Prioritize compliance with evolving regulations, which are expected to continue changing throughout 2023.
- Prepare for the elevated risks of ransomware attacks, which are projected to cause over $30 billion in damages in 2023.
- Protect against business email compromise (BEC) scams, which have increased by 39% since 2020 and can be among the most expensive types of social engineering losses.
Businesses must remain vigilant in the face of ever-evolving cyber threats and take steps to enhance their cybersecurity practices to protect themselves against potential losses. By following these tips, insurance buyers can better position themselves to manage their cyber exposures and secure adequate cyber coverage.
