The Future Of Cyber Insurance
IT Security Guru, February 28th, 2023
Faced with inflated premiums, increasingly demanding compliance requirements and doubts surrounding payment of legitimate claims, organisations are reconsidering the value of cyber insurance. Sean Moran, researcher and writer at JUMPSEC, examines the issues surrounding the changing face of cyber insurance.
Cyber insurers are losing money. Their loss ratios - total claims plus the insurer's costs, divided by total premiums earned - are now consistently above 60%, which presents something of an existential threat to the insurance industry, making cyber risk a potentially uninsurable area due to falling profitability.
The insurance sector is battling its losses by increasing premiums - which have gone up by some 94% between 2019 and 2022 - creating the artificial impression that the sector is growing. The industry is not seeing increased take up rates or expanded coverage - just increased revenues from higher premiums.