Current cyber insurance model is ready for change – cyber advisors

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One of those insurers, Lloyd’s of London, which accounts for nearly a fifth of the global electronic insurance market, has reportedly discouraged its union from doing business online in the next year. Reuters.

“Internet insurance was just aimed at the novel, an unexpected catastrophic event,” Jess Byrne, senior analyst at consultancy Forrester, told SC Magazine. “When things like ransomware were restricted to someone’s grandmother on their old computer, it was a license to print money. But now that the music has stopped completely and they are reeling from those losses.”

Data from market intelligence firm S&P Global showed that the loss rate from electronic insurance has risen in recent years. From 43 cents on the dollar in 2016, the number has jumped to 73 cents on the dollar in 2020.

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Industry insiders interviewed by SC Magazine said the cybersecurity sector responded by “trying to integrate data aggregation to create a more sustainable industry.” This led to the formation of CyberAccuView, a data-sharing service that aims to create a more standardized practice.

However, experts still predict that the policies will be based on “higher baseline safety standards that offer lower maximum payments.”

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They added that a “new breed” of fintech companies focused on data-driven security policies, including the use of network monitoring software, could help create a sustainable cybersecurity model.

“We see a positive trend in the cyber insurance market as organizations embrace the risk assessment process required by insurers as an opportunity to justify and accelerate cybersecurity initiatives,” Chris Reese, Head of Insurance at Cowbell Cyber, told SC Magazine. “Many companies welcome the resources that online insurance providers provide to help them achieve insurance.”

However, there are certain groups that are at risk of being excluded from the market, according to experts. These include companies that can no longer afford higher insurance premiums or those for which electronic coverage has been denied altogether, and ransomware groups themselves.

“We have found that with victims who do not have insurance, conversations are more difficult,” Brice Webster Jacobsen, director of intelligence operations at Internet intelligence firm Groupsense, told SC Magazine. There is often an increased sense of pressure when negotiating the number down to the basics allowing the victim to recover, and sometimes you are not able to bridge that gap between the victim and the threatening actor.”

Industry experts admit that they are still not sure how ransomware gangs will respond to declining profits.

“Ransomware is a low-cost, high-reward program; profit margins will likely remain high, even if they are not as excessively high as they currently are,” they told SC Magazine. Actors can try to improve profits by better targeting or greater volume, or – in the extreme case – forcing them to change offenses.

However, Webster-Jacobsen believes that while reducing the amount and availability of cyber coverage will also lower the amount of payments ransomware groups can receive, it won’t stop them from launching cyber attacks.

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