Cyber insurance remains a hard market, with no relief in sight. In this blog, Relay gathered key statistics about cyberthreats and cyber insurance to help you understand and adapt to this complicated landscape.
Cyberthreats by the Numbers
Data breaches resulted in the exposure of 36 billion records in the first three quarters of 2020, according to RiskBased Security.
Ransomware is among the most common kind of cyberattack. According to IDC's "2021 Ransomware Study,” 37% of global organizations said they were the victim of some form of ransomware attack in 2021.
According to IBM, the average cyberattack costs $3.86 million and takes 280 days to find and contain.
Cisco estimates that distributed denial-of-service (DDoS) attacks will more than double over the next three years, growing from 7.9 million in 2018 to 15.4 million in 2023.
The Cost of Cyber Crime
Cyber crime costs organizations $2.9 million every minute, and major businesses lose $25 per minute as a result of data breaches, according to RiskIQ.
Cyber insurance premiums increased by 74% in 2021, compared to 9% growth for the P/C industry overall.
This last statistics warrants a deeper investigation.
The Problem With Skyrocketing Premiums
Insurers are increasing premiums across the board, regardless of the size or industry of the insured's company. They also routinely cut the primary and excess layers' policy limits offered during prior renewals. Finally, insurers have increased their underwriting practices and become much more selective with their books of business.
Stricter underwriting guidelines have created a need for insureds to improve their risk management framework. As a result, they may decide to adjust their budgets to improve their IT infrastructure. These improvements include added security for remote employees, stricter VPN settings, and the implementation of multi-factor authentication.
More advanced companies may use AI to test trends and verify gaps in security through deep learning. Unfortunately, though, these strategies aren’t foolproof. Cyberattacks can still occur, making coverage imperative.
However, if demand increases but supply remains limited, then where do insurance agents and brokers fit into all of this?
The Undeniable Need for Insurtech
Insurtech — a portmanteau of “insurance” and “technology” — has become a standard tool in several verticals, including the auto and property insurance industries. Auto insurers, for example, provide discounts to insureds using telematics devices. Likewise, property insurers offer discounts to insureds who install temperature and moisture sensors to turn on and off equipment via the Internet of Things (IoT).
In comparison, the use of insurtech in the cyber insurance industry is still in its infancy. Its benefits, however, are unmistakable.
Insurtech empowers brokers and agents to become more efficient in their quoting and proposal processes. Platforms like Relay, for example, help insurance professionals submit and receive a higher volume of quotes more quickly, allowing them to present their clients with a broader array of coverage options and premiums. They can also automatically generate branded proposals, known as Smart Customer Proposals™. The faster you quote, the more you place.
Broker education is an essential piece of the puzzle, too. Given the ever-evolving mandates and requirements imposed by cyber carriers, brokers must arm themselves with an advanced understanding of cyber insurance coverage. That way, insurance professionals have a firm grasp of current trends and requirements and can effectively answer carrier and client questions.
If you’re looking for a reliable resource, Relay can help. Our modules, powered by NetDiligence, assist with customer conversations, alignment with industry-leading analytics providers to create dynamic proposals, and taking the extra step on lines of business to reflect the entire risk management product inclusive of value-add services.
It's becoming quite clear to understand cyber insurance, one must understand insurtech. But understanding and implementing are two very different things. Contact us today to schedule your demo and see the Relay platform in action.