The global cyber insurance market has experienced a decline in premiums over the past year, despite an increase in ransomware attacks, according to a report by broker Howden released on Monday. Premiums for cyber attack protection surged in 2021 and 2022 due to the impact of the COVID-19 pandemic on cyber incidents. However, there has been a drop in premiums over the past year, with double-digit price reductions observed in 2023/24.
Sarah Neild, head of UK cyber retail at Howden, highlighted the importance of basic security measures like multifactor authentication (MFA) in protecting against cyber threats. She also emphasized the significance of investing in IT security and staff training to strengthen overall cyber resilience. Businesses can minimize costs following a cyber attack by implementing robust backup systems such as using cloud providers.
The report revealed that ransomware attacks typically involve encrypting data and demanding cryptocurrency payments in exchange for a decryption key. Although global ransomware attacks declined after Russia’s invasion of Ukraine in February 2022, there was an 18% increase in ransomware incidents in the first five months of 2024 compared to the previous year. The increased willingness of insurers to offer cyber insurance coverage has contributed to the decrease in premiums despite an increase in ransomware attacks globally.
The majority of the cyber insurance business is concentrated in the United States, but Europe is predicted to experience the fastest growth due to lower penetration levels currently. Despite this decline, it’s essential for smaller firms to purchase coverage as they are less likely than larger firms due to a lack of awareness regarding cyber risks. As businesses become more resilient and insurers expand their offerings, we can expect the market to continue evolving to meet changing needs.
Overall, businesses need to prioritize their cybersecurity measures and invest heavily in IT security and staff training if they want to protect themselves from potential losses due to cybercrime.
In conclusion, while there has been a decline in premiums for cyber insurance worldwide despite an increase in ransomware attacks globally, businesses must remain vigilant against potential losses caused by cybers threats. By implementing robust backup systems and investing heavily in IT security and staff training, companies can reduce costs following a cyber attack and minimize its impact on their business operations.