Continuous data breach bringing opportunity for cyber insurance

We live in a world that’s becoming more digitally dependent. Right from our social interactions to professional interchanges and financial transactions, most take place digitally. While digital resources are enabling, they also leave us vulnerable to cyber criminals as a lot of information regarding our personal and professional lives rests in the digital domain. Cyber insurance or cyber security insurance provides coverage from activities such as identity theft, unauthorized transactions, and more with rapidly increasing digitalisation, cyber risks and loss scenarios keep changing quickly.

For all risk owners this makes it even more important to learn from past incidents and identify upcoming cybersecurity trends, threats and vulnerabilities. Cyber insurers have already proven that they can be part of the solution when it comes to building up resiliency and preparedness across all industries. The total global economic damage of cybercrime is a controversial issue.

Cybersecurity Ventures estimates global economic cybercrime costs to grow by 15% per year over the next five years, reaching $10.5 trillion annually by 2025. In 2021, the number is expected to be $6 trillion up from $3 trillion in 2015. This is no surprise as the cybercriminal world is advancing at a fast pace.

Having cyber insurance is a good idea if the costs make sense — it could be the difference between going out of business and staying afloat. Even if you can afford and qualify for coverage, you should know that cybercriminals like to attack companies with cyber insurance. According to a recent survey, these organizations are over two times more likely to pay ransoms than those without it.

Hackers even find out the value of potential victims' coverage by breaking into the insurance companies first so they can demand the highest possible ransom. Once they've extorted organizations with cyber insurance, they turn their attention to the insurers and go after them. This puts insurance companies in an unenviable situation. Not only are they potential victims themselves, but the business is less fruitful than in years past.

Cyber insurance payouts are now above 70%, which is the break-even point, forcing insurance companies to make tough decisions. More businesses will seek cyber insurance as mounting concerns over cyberattacks persist. It can be a safety net, but in addition to the higher premiums, more stringent criteria, and the target it puts on your back, insurance isn't enough to ensure overall resiliency.