Cyber Insights 2023: Cyberinsurance
January 31, 2023 – Published on Security Week
yberinsurance emerged into the mainstream in 2020. In 2021 it found its sums were wrong over ransomware and it had to increase premiums dramatically. In 2022, Russia invaded Ukraine with the potential for more serious and more costly global nation state cyberattacks – and Lloyds of London announced a stronger and more clear war exclusions clause.
Higher premiums and wider exclusions are the primary methods for insurance to balance its books – and it is already having to use both. The question for 2023 and beyond is whether the cyberinsurance industry can make a profit without destroying its market. But one thing is certain: a mainstream, funds rich business like insurance will not easily relinquish a market from which it can profit.
It has a third tool, which has not yet been fully unleashed: prerequisites for cover.
2023 is a watershed moment for cyberinsurance. It will not abandon what promises to be a massive market – but clearly it cannot continue with its makeshift approach of simply increasing both premiums and exclusions to balance the books indefinitely.
One of the strongest likelihoods over the coming years, however, is the growth of cybersecurity requirement impositions; that is, insurers will decline coverage unless the insured conforms to a specified security posture. This is the final option – when you can no longer increase premiums and exclusions, you have to reduce claims. And this is best achieved by helping industry prevent cyber incidents.
Mark Lance, VP of DFIR and threat intelligence at GuidePoint Security, even suggests what it might look like. “We’ll continue to see an expansion from traditional questionnaires to actual validation, which will not only include a baseline of standard security solutions (EDR, PAM, MFA), their associated and current configurations (ASM) but also the presence of standard policies (IR Plans, Playbooks), and execution capabilities (Proof of User Awareness Training and Tabletop validation).”
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