Global cyber insurance market has further matured
Cyber risk continues to increase, driven by rapid technological advances such as generative artificial intelligence or cloud technology. Global industries are increasingly dependent on IT, Internet of Things, Operational Technology and digital services, such as cloud computing, each of which represent a critical part of the supply chain for many risk owners, according to Munich Re Cyber Risk and Insurance Survey 2024.
According to Allianz Cyber Security Global Trends, hackers are increasingly targeting IT and physical supply chains, launching mass cyber-attacks and finding new ways to extort money from companies, large and small.
Technology trends with significant relevance for companies
Through expertise, strong collaborative networks and clear focus on data analytics, risk quantification and accumulation modelling, the insurance industry has a deep understanding of the threat landscape and a discernment of the limits of insurability.
Despite the fact that today’s value chains are largely dependent on digital assets, the level of protection appears to remain inadequate.
Improvements in cyber security and business continuity are helping to combat encryption-based ransomware attacks, yet the cyber threat landscape is continually evolving. 2023 has seen a worrying resurgence in ransomware and extortion claims, resulting in an uptick in costly incidents, demonstrating that although progress is being made, the threat posed by ransomware shows little sign of abating.
The current cyber risk landscape
Over the past months, Munich Re has observed a surge in cyber-attacks, with ransomware once again on the rise.
The annual ransom crypto payment spiked from $567m to $1.1bn. Other costly attack vectors were business email compromise and supply chain attacks.
Between 2021 and 2023, BECs caused $3bn in losses and affected 22,000 victims globally, and, in 2023 alone, the number of BEC cases doubled. There were twice as many software supply chain attacks in 2023 compared to the previous three years combined.
Allianz analysis of a number of large insurance cyber losses shows that the proportion of cases in which data is exfiltrated is increasing every year — from 40% of cases in 2019 to around 77% of cases in 2022, with 2023 on course to surpass last year’s total.
Major Cyber Risk Drivers
Compiling accurate cybercrime statistics poses a significant challenge for experts and authorities, as the data likely captures only a fraction of the total incidents. For instance, the German Federal Criminal Police Office suggests that up to 91.5% of cyber incidents remain unreported (see Cyber Insurance, Ransomware & Hybrid Warfare Outlook).
Projections by Statista indicate that by 2028, the global cost of cybercrime could escalate to $13.8 trillion, rising from $8.15 trillion
These statistics underscore the critical role of insurance in managing cyber risks.
In 2023, the software supply chain cost businesses $45.8bn to address 245,000 supply chain incidents. The attack against MOVEit, which leveraged a zero-day vulnerability in data transfer software, was the most prominent attack in this category.
Data breaches remained at a high level, with the average cost of a breach reaching an all-time high of $4.45 million, according to IBM.
Estimated cost of cybercrime worldwide 2017–2028
Companies suffering from cyber-attacks incur various financial losses, including business interruption, costs related to incident response, and liabilities from data breaches. Cyber insurance policies provide a financial safety net against these losses.
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FULL REPORT — https://beinsure.com/cyber-risk-insurance-market-trends/
