Things continue to change in the world of cyber insurance. The cyber insurance market is shifting. It is due to the dramatic changes that happen in Ransomware attacks. Due to this, cyber policies keep on changing as the market shift. Therefore, the insured continues to witness changes in terms.
The insurers are in a moment of panic, especially those who cover ransomware. The policy can bring losses. For example, a company by the name of CAN Finance Corp paid over $40 million. It is one of the world’s largest insurance companies. It is the highest payout reported in the history of ransom. Furthermore, Ravil hackers were asking for over $70 million to beat the record. Unfortunately, it did not go through.
Hackers Ransomware attack attraction
Because of ransomware attacks being inexpensive, this attracts many hackers to do it. Hackers get high profits too. Moreover, attacks have been on an upward trend in 2020. Reports indicate that in 2020, ransomware attacks climaxed.
Moreover, there were many interconnected blackmail events too. As stated by Palo Alto Networks, many attacks are unreported. The company also reported that there were $312,493 average attack payments in 2020. It was a 171 percent increase from 2019. Due to all these attacks, insurers are feeling the pain. There is always a feeling of not being able to cover all claims.
What triggers an increase in cyber policy demand
The ever-increasing ransomware attacks keep on making cyber insurance policy demand grow. Every time people hear that there will be an attack, they start coming for the cyber insurance policy. Therefore, just a rumor can also trigger an increase in cybersecurity policy sales. Those are two key drivers of increased sales of cyber insurance. Government Accountability Office (GAO) reported this in cyber insurance.
Lack of ransomware knowledge and data collection
Even though it is a good thing, insurance companies operate under limited knowledge of ransomware. It is costly to them as it leads to erratic risk assessments, limiting them further. Many attacks go unreported.
They do not have information to help in actuarial evaluations. The partial data reliance on cyber insurance costs them a lot. Again, most of them rely on historical loss data to determine risk and premium rates.
To conclude, there are many obstacles. Even though all this confusion continues in cyber insurance, there will be changes.