The Growing Cyber Insurance Market
Technology is consistently growing and shifting each and every day. Over 38 years ago, the Internet was created. Nowadays, people depend on it to make a living. Cyberspace has become a vast, open network allowing users to share information, interact, swap ideas, play games, engage in discussions or social forums, conduct business and create intuitive media, among many other activities. Cyberspace is what human societies make of it.
As such, it has led to criminal activity, as seen in ‘the real world’. For example, if you use the Internet for banking, social networking or other services, you may risk theft of your personal information such as your name, address and credit card details. Virus attacks are also prevalent and can be used against you, with ransomware being a typical example where criminals infect your computer and then demand a ransom for its release. There are also specific locations online where people commit illegal activity, such as the ‘deep web’ and ‘dark web.’
As national governments see potential threats to the security of their citizens and the stability of their regimes arising within cyberspace, they act to control both access and content to protect said citizens and their own interests. This is why you desperately need cyber insurance.
What is cyber insurance, and why exactly is it required?
Cyber insurance is a form of cover designed to protect your business from threats in the digital age, such as data breaches or malicious cyber hacks on work computer systems. Although you and your business are responsible for protecting your software and hardware, sometimes you may need a safety net just in case a cybercriminal were to breach your defences. That is why cyber liability cover exists, providing crucial support to help your business stay afloat.
Suppose your data has been compromised, damaged, corrupted or lost due to a cyber attack. In that case, the cyber insurance policy will cover any first or third-party financial and reputational costs. For example, First-party covers the costs of investigating the cybercrime, recovering lost data, restoring computer systems, loss of income due to business shutdown, reputation management, extortion payments demanded by criminals, and notification costs. Third-party covers damages and settlements and Cybercrimegally defending yourself against claims of a GDPR breach.
Don’t for a second believe that because it hasn’t happened to your business or a peer’s business that it won’t happen at all. Cybercrime is very real and those without the proper protection in place, the easier targets, so to say, are the ones most likely to be at risk.
The Insurance Information Institute says: “Insurance experts now consider the risk of cyber liability losses to exceed the risk of fraud or theft. In this tumultuous environment, your business can take several steps to limit risks, including purchasing cyber liability insurance.”
How and why the market and need is growing.
Between 2021 and 2026, the cyber insurance market is forecast to grow from £5.36 billion to £20.29 billion. Cases of unauthorised stealing or accessing sensitive business data have been rising and, therefore, driving the cybersecurity insurance market to inflate.
IT advances, communications technologies, and the smart energy grid are changing critical infrastructure and business networks landscape. However, this also leads to rapidly advanced threats. In 2019, UK businesses were victimised approximately 7,073,069 times.
Throughout the pandemic, more and more businesses have implemented preventative measures relating to remote working. For example, a rise in video communication platforms, such as Zoom, and a reliance on online ordering have subsequently seen cybercriminals attempt more attacks. This is because of the weaknesses which can be easily exploited.
A key development in the market is the announcement from XL Catlin and RedSeal of their ‘dynamic approach’ to cyber insurance. They use an objective measurement of a network’s resilience to help underwriters more thoroughly evaluate their clients’ risks over time, which therefore helps them continue to improve cybersecurity and the insurance terms as a result.
XL Catlin’s approach offers its clients a more accurate, dynamic and helpful service. At the same time, RedSeal’s patented network modelling and risk scoring platform help creates a network model from the inside out. RedSeal is then able to calculate the ‘Digital Resilience Score’ – a holistic measure of the network’s resilience which is similar to a credit-landscape worthiness score. It determines:
- How weaknesses from incorrectly configured devices/software could impact the network;
- How accessible a company’s valuable assets are to attackers;
- The degree to which the network is understood.
More resilient networks deliver higher scores, meaning they are at lower risk. Once it installs and the Score is obtained, they can determine if the client’s resilience warrants improved terms. This will help clients improve their cybersecurity and, in turn, their insurance terms.
As the market continues to rise and key developments occur, it may be wise for businesses to invest in cyber insurance while it’s still growing, as the benefits seem to outweigh the negatives.
So, how can we assist you?
Victis Corp is designed to give you a helping hand when it comes to growing your business. Our senior management team has a wealth of experience spanning over one hundred years of industry knowledge. We also have in-depth administrative tools to help your business monitor all information relating to product reliability. To be in with utilising all of these fantastic assets, then call 0844 967 2600 or email firstname.lastname@example.org today! We look forward to speaking with you.