Following the record breaking data breaches that were suffered by several insurers, premiums are soaring.
The large number of high profile data breaches that have been suffered by health insurers over the last year or so have made the cost of cyber insurance coverage skyrocket for those companies.
This rise in rates has affected not only insurance companies but also retailers and banks.
The reason is that those sectors have also been victims of data breaches and cyber insurance companies are seeing that it is becoming increasingly costly to cover the risk of attacks of that magnitude. Moreover, it is not only the premiums that will be increasing for this coverage, but other factors, as well. Deductibles, for example, have been rapidly rising, but limits have, too. Some sources have been indicating that it has caused some companies to find it challenging to find the funds that will be necessary to purchase the coverage at a level they feel is appropriate to their risk.
Hackers have been targeting health insurers and financial institutions, making cyber insurance especially costly for them.
Those types of business have been targeted by hackers as a result of the high depth and volume of personal data contained within their files. At the moment, some insurance companies have been maintaining coverage with a limit of only $100 million, which has the potential to fall short of the requirements of larger companies, by quite a large amount. Moreover, while retailers essentially saw an even level of cyber premiums last year, this year has brought rate increases by nearly a third.
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According to an article in Reuters, Anthem has been able to find only $100 million in coverage, but this was made possible only after it agreed to a deductible of $25 million on attacks it would be facing in the future. Some larger cyber insurers are simply turning away clients that they feel are too risky for them to cover.
What has yet to be seen is how much the cost of cyber insurance on insurers will be translated into the premiums being paid by policyholders with those companies.