A recent report by broker Howden reveals that global cyber insurance premiums are on a steady decline, despite the rise in ransomware attacks. The cyber insurance market experienced double-digit price reductions in 2023/24 due to companies’ increased ability to mitigate losses from cybercrime. Sarah Neild, head of UK cyber retail at Howden, emphasized the importance of basic cybersecurity practices like multifactor authentication, which she likened to locking the door when leaving home. She also noted that businesses are investing more in IT security and staff training, making them more resilient to cyber attacks.
Insurers are increasingly willing to offer cyber insurance, contributing to the price decreases. Ransomware attacks have decreased after Russia’s invasion of Ukraine in February 2022, but recorded incidents rose 18% in the first five months of 2024 compared to a year earlier. Ransomware typically involves encrypting data and demanding cryptocurrency payments for their release.
One common cost after a cyber attack is business interruption, but companies can reduce these costs by implementing better back-up systems, such as using cloud providers. While the majority of cyber insurance business is in the United States, Europe is expected to experience rapid growth in the $15 billion global cyber insurance market in the coming years as penetration levels are currently lower in that region. Small firms are less likely to buy cyber insurance due to a lack of awareness of their risks.