The cyber insurance market witnessed a major shift between 2022 and 2023, with a combination of positive trends and facts ultimately creating a soft cyber insurance market, which included higher pricing after a two-year hard market, reduced claim experience due to a lull in ransomware throughout 2022, and improved cybersecurity controls.
A recent survey conducted by independent insurance brokerage and consulting firm, Woodruff Sawyer shows that a substantial amount of underwriters believe that cyber risk will increase in 2024.
In particular, underwriters are concerned about ransomware attacks (94%), supply-chain attacks (75%) and privacy violations (69%).
In terms of ransomware, 63% of underwriters ranked it as the number one threat for 2024, which has shifted from the previous year’s 53%.
2023 also saw an increase in ransomware attacks that relied on data exfiltration – also known as a data theft – as opposed to the deployment of network-encrypting malware.
Moreover, cyber warfare was heavily flagged up by Woodruff Swayer. In 2023, cyber insurance carriers attempted to clarify their stance on cyber war and the application of war exclusion, to little success.
The current wars in Ukraine and Gaza bring the prospect of an attack spilling outside of intended targets and impacting the broader private sector into real focus.
Artificial Intelligence (AI) was also highlighted, with the brokerage stating that AI won’t change cyber risk, but it may exacerbate the severity of a problem when it arises.
As a result, this impact will increase the importance of making an informed choice using data science and analytics when purchasing cyber insurance.
Another key statistic from the survey was that 81% of participating underwriters believe cyber insurance premiums will increase slightly in 2024.
Dan Burke, Senior Vice President, and National Cyber Practice Leader, commented: “As the market shifts, companies must understand their changing risks and adjust accordingly. One way to stay on top of changes: Woodruff Sawyer’s annual Cyber Looking Ahead Guide, where we aim to give you clarity on the trends that affect your insurance coverage and rates.
“We understand the cyber risk challenges businesses face today. With our extensive expertise and experience in cyber liability, we leverage data to empower our clients to make informed decisions about their cyber risk management strategy and insurance programs.”
