Despite an increase in ransomware attacks, cyber insurance premiums are declining worldwide as businesses improve their ability to mitigate losses from cybercrime, according to a report by broker Howden. Premiums for cyber attack protection surged in 2021 and 2022 due to the impact of the COVID-19 pandemic on cyber incidents. However, there has been a drop in premiums over the past year, with double-digit price reductions observed in 2023/24, as stated in the annual Howden report.
Security measures such as multifactor authentication (MFA) have played a crucial role in safeguarding companies’ data, leading to a decrease in insurance claims. Sarah Neild, head of UK cyber retail at Howden, highlighted the importance of basic security measures like MFA in protecting against cyber threats. She also emphasized the significance of investing in IT security and staff training to strengthen overall cyber resilience.
The increased willingness of insurers to offer cyber insurance coverage has contributed to the decrease in premiums, even as cyber attacks are on the rise. Although global ransomware attacks declined after Russia’s invasion of Ukraine in February 2022, the report revealed an 18% increase in ransomware incidents in the first five months of 2024 compared to the previous year. Ransomware attacks typically involve encrypting data and demanding cryptocurrency payments in exchange for a decryption key.
Business interruption is often the most significant cost following a cyber attack, but businesses can minimize these costs by implementing robust backup systems, such as using cloud providers. The majority of cyber insurance business is concentrated in the United States, but Europe is expected to experience the fastest growth in the $15 billion global cyber insurance market due to lower penetration levels currently.
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