The average cost for cyber insurance rose about five percent in 2019 despite the large increase in the number of attacks and claims files, a new report has found.
The business insurance advisory firm AdvisorSmith told SC Media this counter intuitive result is due to the fact that while claims rose 20 percent in 2018 from 2017, the last year from which data is available, the severity of loss on each claim declined by about 11 percent negating the need for a massive surge in premium prices.
“Also, the ransomware attacks that have been in the news a lot recently are often subject to sublimits, which limits the insurance company’s losses. For example, on a $1,000,000 policy, the ransomware sublimit might be as low as $25,000. Insurance companies are getting better at underwriting cyber risk as they gain more experience in the sector, and companies are also strengthening their cyber defenses to counter the rise in cyberattacks,” said Adrian Mak, CEO of AdvisorSmith.
The five percent increase bumped up the average annual premium to $1,501 for a business facing moderate risks with liability limits of $1 million, a $10,000 deductible, and $1 million in company revenu ..
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