Insurers are raising premiums for the cyber insurance coverage that they provide
Over the past two years, companies in the United States have been targeted by aggressive cyber attacks. This has prompted insurers to increase premiums on cyber insurance coverage by a massive margin. Some companies are perceived as being a high risk, which means that they are seeing higher costs when it comes to protecting themselves from digital attacks. Insurers are not just raising premiums on cyber insurance coverage, however, and many companies are looking for a solution to this problem.
Deductibles are on the rise as well
Beyond rate increases, insurers are also raising deductibles on coverage, forcing companies to face higher out-of-pocket costs when they are the subject of a digital attack, such as a data breach. In some cases, insurers have begun limiting the amount of coverage they provide to $100 million. For large companies, this can leave them exposed to significant losses if they are hit with a major hack. Some companies are beginning to struggle to find the money to purchase and maintain their cyber insurance coverage.
Some companies are having trouble finding money to keep their policies active
Insurance companies are not immune to digital risks, of course. Health insurer Anthem recently announced that it had fallen victim to a major data breach, which compromised the data of some 79 million people that receive coverage from the company. Anthem is also taking note of the rising cost of cyber insurance coverage. For some companies, renewing their coverage is becoming “prohibitively expensive.” This may mean that some companies will forgo cyber insurance completely as a way to save costs. For these companies, they may not consider themselves to be at any significant risk.
Digital threats may provide cyber insurance companies with new opportunities for growth
While the digital world is becoming more dangerous, the increasing frequency of cyber attacks could be good news for those that offer cyber insurance policies. While these insurers could see significant losses if their policyholders are subject to a digital attack, high premiums and high deductibles present a very promising opportunity for economic growth.