Cyber Insurance Is Back From the Brink After Onslaught of Ransomware Attacks
The cyber-insurance market, battered by a rash of pandemic-era ransomware attacks, is making a comeback. Price hikes are moderating, new carriers and fresh sources of capital are emerging, and companies can better afford coverage. From a report: Cyber-insurance pricing increased 10% from a year earlier in January, a fraction of the 110% annual increase reported in the first quarter of 2022, preliminary data from insurance broker Marsh McLennan show. If those trends continue, prices could be set to decline, said Tom Reagan, Marsh's cyber practice leader. The reversal would follow a wave of digital intrusions that dominated the work-from-home era and forced insurers to recalibrate both how they write policies and their risk appetites. Those attacks also pushed their clients to adopt stronger cybersecurity measures. The brutal conditions in the market have let up since then, with claim frequency declining in the fourth quarter of 2022 even as severity remained elevated, according to Marsh. "What we're left with is a very, very, very different market than what we went into two or three years ago," said Paul Bantick, the global head of cyber risks at London-based insurer Beazley. "We have a mature market that has stood up against a huge test." The risks posed by cyber criminals are still enormous. Ransomware attacks against industrial organizations increased by 87% in 2022 from the year before, while the US Treasury Department said financial institutions flagged nearly $1.2 billion in likely ransomware-related payments in 2021. Recent high-profile breaches at financial services firm ION Trading UK and a major Asian data center emphasized the grim risk posed by hackers. Even so, the total amount extorted from ransomware victims in 2022 dropped to $456.8 million from $765.6 million the year before, according to data from Chainalysis.
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