With more shopping done online, businesses are becoming growing targets for malware. But they’re also falling victim to rising cyber insurance costs. Here’s everything you need to know about the rise in cyber insurance costs and what it means for your business.
The Rise in Ransomware
One of the biggest stories of 2021 has been the big increase in ransomware attacks. While not a new phenomenon, it seems that attacks are happening more frequently. In fact, Barracuda researchers reportedly identified and analyzed 121 ransomware incidents so far in 2021 — a 64% increase in attacks. The ransom demands also keep getting bigger. For instance, Palo Alto Networks’ Unit 42 reported an 82% increase in the amount of the average ransom.
The Consequent Rise in Cyber Insurance Costs
With the rise in ransomware, the demand for and cost of cyber insurance is also going up. The USA Government Accountability Office, says that the proportion of existing clients opting for cyber coverage rose 46% in 2020. It’s good that more businesses are opting for coverage. But some insurance companies are experiencing a shortage in historical data to use as a starting rate for coverages.
For example, one North Carolina school board saw their rate rise 235% in one year! Their annual insurance fee went from $6,653 to $22,513 USD. Further, CEOs of two different companies have confirmed these price hikes and are speaking out against them.
AIG CEO Peter Zaffino said that its own premium prices are up nearly 40% globally, with the largest increase in North America.
Meanwhile, Chubb’s Chief Executive Evan Greenberg commented: “rising prices of insurance against cyberattacks fail to take account of the potentially [sic] catastrophic effects of a widespread attack.” Cyber insurance covers a range of ransomware-related costs like extortion demands, remediation efforts, and other financial losses.
How to Protect Your Business
As cyber risks continue to rise, so do cyber insurance rates. Don’t worry about increasing rates! There are four steps your business can take to reduce your cyber risk, and in turn, lower your insurance rates:
- Implement multi-factor authentication
- Quickly patch security vulnerabilities
- Cyber awareness training
- Store data backups offsite and offline