Cyber insurance costs and requirements climb in 2023
November 2023 by Databarracks
Seven out of 10 companies reported changes to their cyber insurance in the last 12 months, according to new research from Databarracks.
The finding is based on the 2023 Data Health Check – Databarracks’ annual survey of 500 IT decision makers across several industries.
More than 40% of organisations reported an increased requirement from their insurers over the last 12 months for cyber security tools. Just under a third said they had experienced an increase in the cost of cyber insurance.
More than half of those who experienced a cyber-attack in the last 12 months made a claim on their cyber insurance. The Banking and Finance sector reports the highest number of claims compared to other industries.
Databarracks Managing Director, James Watts, commented:
“It is harder and more expensive for organisations to get cyber insurance cover.
“The cost and conditions of cyber insurance began to rise in 2021 in response to an earlier ongoing cycle of cyber-attacks and subsequent massive payouts.
“While increased cost isn’t something any organisation will be happy about, these changes will lead to an overall improvement in cyber resilience.
“For cyber insurance to remain viable, insurers needed to increase the cost to their customers – and reduce their likelihood of paying out.
“It is impossible to guarantee that the organisation will not suffer an attack. But, by mandating good security practices, processes and tools, robust measures in insurance policies can contribute to significantly reducing the risk.
“Cyber insurance is one of the few levers that can impact ransomware payments. For it to help raise the base level of preparedness, uptake needs to increase too. It is positive to see that despite the increase in cost and demand, the number of organisations with cyber insurance has also increased.
“There is often scepticism about cyber insurance. Some organisations think it may make them a target to cyber attackers because it would increase the likelihood of a payout on a ransomware attack.
“We strongly recommend cyber insurance. Not only does it cover costs for those who do face an incident, but the forensic expertise it provides helps get the organisation operational as quickly as possible. In our experience, it adds enormous value.”