As part of a new report on cybersecurity risks, analysts at Fitch Ratings have noted that ransomware in particular is becoming a “growing concern” for the re/insurance industry.
The rating agency said cybersecurity is arguably reaching an “acute phase,” following high-profile events at several of the largest and most sophisticated insurance companies.
Fitch sees attacks as continuing to increase at an alarming rate for several reasons, including the potential for financial payouts, increased availability of tools to commit cybercrime, limited criminal enforcement to date and a growing digital footprint.
Attacks are also becoming more sophisticated with the involvement of well-funded organized crime groups and nation-state actors.
And while cybersecurity risk often falls under the rubric of “nonfinancial” risk, there is a very real and growing financial impact, analysts point out.
This results from breaches that require investments to offset risks and costs associated with fines, direct breach costs, reputational damage, supply chain interruptions and lost business.
Among the key findings of the report was a positive correlation between insurers with high financial strength ratings and good cybersecurity scores, implying that companies focused on managing their own credit risk tightly also appear better at managing their cyber risks.
“The global insurance industry experienced several high-profile cyber events in 2021,” said Fitch Global Insurance Group Head Keith Buckley. “In particular, ransomware is an industry issue that is a growing concern. As a result, cyber is becoming increasingly important to our ratings analysis.”