Cyber Insurance: Where are we now?

May 21, 2021 / by AAIS

During the height of the COVID pandemic, Berkley Re Solutions’ Jeff Cron joined AAIS for a an AAIS Pulse session looking at ‘Cyber Crime: The Online Home Invasion.’   "We’re all online more, seeing content, and clicking links to different articles, videos, and other forms of media. While the actual risk hasn’t changed, volume has magnified, with more scams and more screen time.”

With the COVID-19 pandemic, distributed workforces have increased, and remote work has gotten even more popular. So, how does that affect cyber insurance and cyber risks? In short, the risks and policies are somewhat the same, however the growth in remote work and education has caused a “magnification of risks.”

Ransomware, for instance, is “a type of malicious software designed to block access to a computer system until a sum of money is paid” (Oxford Languages, 2021). Instances of ransomware are drastically increasing, and attacks are getting worse, according to an April 2021 Insurance Business article titled, ’Cyber Insurance Claims Explode in Severity.’

The same article suggests that “threat actors are spending a significant amount of time in the insured’s systems, gathering valuable information before they deploy the ransomware. We’ve started to see claims where hackers show proof that they have stolen information and threaten to publish that information unless specific demands are met…in addition to the ransom.” The ‘asks’ are also increasing from pre-COVID 19 ranges of $8,000-$30,000 per ransomware attack to $100,000- $1 Million (Insurance Business, April 2021). With increased attacks, inconsistencies and lack of standardization across cyber insurance policies and forms, people have come to describe the cyber insurance market as “dysfunctional” (Business Insurance, March 2021).

One can hope, with COVID vaccinations increasing and CDC restrictions lifting, that the world is on its way back to what was once “normal”– if “normalcy,”  Perhaps more people will go back to an office and a we'll experience a decrease in cyber threats as a result. The insurance industry will then ne able tp address the dysfunction and get on the right path to proper coverage. Until then, follow Jeff Cron’s advice and “think twice before clicking on links” (AAIS, September 2021).

 

Sources:

https://aaisviews.aaisonline.com/aais-views/cyber-crime-the-online-home-invasion

https://www.insurancebusinessmag.com/us/news/cyber/cyber-insurance-claims-explode-in-severity-253269.aspx

https://www.insurancebusinessmag.com/us/news/cyber/dysfunctional-cyber-insurance-market-puts-pressure-on-brokers-248607.aspx

Tags: Personal Lines, Issues & Trends, Cyber, New/Emerging Risks, P&C Insurers, Berkley Re

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