As cyber markets continue to limit their exposure, buyers should be prepared to face dramatic premium increases or non-renewals if they are unable to demonstrate certain minimum-security standards, according to WTW’s 2022 Spring update.
Primary and excess cyber renewals are now averaging premium increases in excess of 200% in some cases. Increases will be steepest for those organizations that cannot demonstrate strong cyber risk controls, culture and overall cyber hygiene, WTW says.
Sectors expected to be most badly affected include healthcare, higher education, public entities, manufacturing, financial institutions, construction and large media and technology companies.
Renewals are also taking longer to complete because carriers do not want to quote early for fear of an incident occurring between quoting and binding, meaning it is more important than ever to start the submission process early so materials can be refined for best presentation to underwriters.
The report finds that COVID-19 continues to impact the cyber market. With so many more employees working from home, there has been an increase in phishing and hacking activity.
According to the IBM and Ponemon 2021 Cost of a Data Breach Report, the average breach cost was $1.07 million higher in cases where remote work was a factor, as network security is generally less robust in WFH set-ups.
As cyberattacks become more sophisticated, these days bei9ng able to threaten a firm’s entire electronic infrastructure, ransom demands have increased, often reaching eight figures.