Cyber insurance premiums are falling globally as companies become more adept at limiting their losses from cybercrime, even as ransomware attacks increase, broker Howden said in a report published Monday.
Insurance premiums meant to protect businesses from cyber attacks have skyrocketed in 2021 and 2022 as the COVID-19 pandemic has led to cyber incidents.
But premiums fell last year, according to Howden’s annual report. The cyber insurance market has seen double-digit price falls in 2023/24, according to Howden.
Increased security, such as multi-factor authentication, has helped protect corporate data and thereby reduce claims.
“Multi-factor authentication is the most basic thing you can do, it’s like locking the door when you leave the house,” said Sarah Neild, head of UK e-sales at Howden.
“Cyber security is a beast on many levels,” Ms Neild added, also highlighting the need for more investment in IT security, including staff training.
“Customers are generally more robust.
Insurers’ increased interest in cyber insurance is also resulting in lower prices, Neild said, even as attacks are increasing.
Global ransomware attacks declined after Russia’s invasion of Ukraine in February 2022, as hackers from those countries focused on the military effort.
However, recorded ransomware incidents increased by 18% in the first five months of 2024 compared to the previous year, according to the report.
Ransomware works by encrypting data. Typically, hackers offer victims of an attack a password that allows them to recover data in return for payment in cryptocurrency.
Business interruption is typically the biggest cost after a cyber attack, but companies are able to reduce these costs with better backup systems, such as using cloud service providers (cloud), according to the report.
Most of the cyber insurance activity takes place in the United States, but the $15 billion global cyber insurance market is expected to grow fastest in Europe over the course of the year, according to the report.
Small businesses are less likely to purchase cyber insurance, in part due to a lack of awareness of cyber risks, the report adds. (Reporting by Carolyn Cohn; Writing by Alison Williams)
