Insurers have increased their premiums for coverage of cyber attacks as a surge in high-profile attacks and government action have boosted demand for products, The Wall Street Journal reported May 18.
Four things to know:
- Direct-written premiums collected by the largest U.S. insurance carriers in 2021 increased by 92 percent year-over-year, according to information submitted to the National Association of Insurance Commissioners.
- The price increase has also allowed the U.S. cyber insurance industry to reduce the percentage of its income that it pays out to claimants, to 65.4 percent in 2021 from 72.5 percent in 2020. The drastic rate increases are a sign the new market is maturing quickly, executives told the Journal.
- Carriers are not only upping their costs, but cutting what their policies cover, worrying security experts who say operations by nonstate actors could expand the legal gray area around what is and isn't covered by insurance.
- The market increase is being attributed to a surge of costly ransomware attacks that have disrupted businesses and organizations, as well as a wave of new cyber regulations from U.S. government agencies, according to the report.
HHS warned healthcare organizations that the majority of ransomware attacks on the healthcare and public health sector in the first quarter of 2022 were conducted by ransomware-as-a-service groups.