As seen in Insurance Journal | January 22, 2020
Insurance Journal recently reported that U.S. insurers are ramping up cyber-insurance rates by as much as 25% and trying to curb exposure to vulnerable customers after a surge of costly claims.
As the article states, the changes follow a challenging year of hackers using malicious programs, known as ransomware, to take down systems that control everything from hospital billing to manufacturing. They stop only after receiving increasingly hefty payments.
Thoughts from Kelly Geary
The return on investment associated with a ransomware attack is incredible. It is in excess of 1500%. The financial motivation behind ransomware, coupled with rapid advances in technology, is transforming cyber extortion.
Cybercriminals have honed their craft – increased the volume, efficiency, scope and profitability of the attacks. The costs associated with these attacks have increased substantially in the past six to nine months. The demand amounts are much higher and the response and recovery costs are becoming harder to control and contain. The insurance market is reacting. Cyber insurers are re-evaluating the scope of coverage being offered, the underwriting criteria, the limits, retentions and, of course, the price.
EPIC’s Cybersecurity Team
The impact and publicity of major breaches has driven boards of directors to significantly increase budgets for cybersecurity programs across most companies. Though some companies have implemented increased measures, the reality is that most of these measures are inadequate. Security breaches create significant business disruption, negatively impact stock performance, and are frequently resulting in termination of company officers. The professionals at EPIC have identified cyber risk exposure through emerging technologies to be the top risk facing the business and industry.
National Executive Risk & Cyber Practice Leader