Insurance for cyberattacks is becoming more expensive.
According to recent research, cyber insurance rates have risen dramatically in the last year as high-profile occurrences have kept cyber hazards in the spotlight.
According to information compiled by experts at Fitch Ratings, spending on standalone cyber insurance coverage grew by 92 percent to over $3.1 billion in the United States last year.
According to the study, cyber insurance premiums have grown at a much faster rate than other commercial business lines, and cyber insurance is currently the fastest growing market for US property and casualty (P&C) insurers.
Why has the price increased?
The increase in insurance premiums, according to Fitch, is due to an increase in the number of cyberattacks.
According to Fitch’s research, the number of cyber insurance claims has climbed by 100% in the last three years, with 8,100 claims paid in total in 2021, a 200 percent increase year over year.
Meanwhile, according to figures, spending on cyber insurance direct written premiums increased by 74% in 2021, reaching about $5 billion.
However, a few number of businesses continue to dominate the rapidly expanding market.
In 2021, the top ten cyber insurance underwriters had 57 percent of the US market share, down from 67 percent the year before.
Chubb Limited had a 10% market share, while Fairfax Financial Holdings Limited (FFH) and AXA XL each had 10% and 9%.
With hacks like the Colonial Pipeline event in 2021 demonstrating the potential for cyberattacks to inflict widespread misery outside the borders of their target businesses, it’s no surprise that cyber insurance premiums are soaring.
According to a research from cybersecurity firm Sophos, two-thirds (66%) of mid-sized firms globally were hit by ransomware last year, up from 37% the year before.
Insurance companies are not immune to the challenge.
AON, a British-American multinational firm that sells financial risk-mitigation solutions, announced that it had been infected by ransomware.
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