The world of cyber insurance is in a state of flux. The reason: ransomware creates huge financial impacts. And how it will change insurance in the future is unclear. The insurance industry is struggling to develop cyber liability insurance offerings. Meanwhile, history is proving to be a poor guide to what comes next.
Welcome to the new normal — where nothing in the cyber insurance business is normal.
How Cyber Insurance Became a Risky Business
The U.S. Government Accountability Office (GAO) published a report on May 20 on the rapid recent change in the insurance industry resulting from recent catastrophic ransomware attacks. These changes paint a picture of unsettling flux in the market, including:
The percentage of insurance clients opting for cyber coverage rose. Compare roughly one-quarter (26%) in 2016 to one-half (47%) in 2020.
Insurance prices rose between 10% and 30% in just the latter part of 2020.
Insurance companies are lowering coverage limits for some industries, such as health care and education.
Insurers are spinning cyber coverage out as a separate policy rather than bundling that coverage with broader coverage.
Insurance coverage is also hampered by a lack of broadly accepted definitions, according to the GAO report. Terms like ‘cyberterrorism’ remain ambiguous. Even the definition of ‘ransomware’ is less exact than it should be. This leads to potential misunderstandings between insurance companies and their policyholders.
The GAO concluded that “the extent to which cyber insurance will continue to be generally available and affordable remains uncertain”.
Welcome to the World of Ransomware as a Service
“When the going gets weird, the weird turn pro.” And Hunter S. Thompson was right about that.
Rans ..
Support the originator by clicking the read the rest link below.
