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Financial experts warn: Cyber coverage is becoming more expensive and difficult to obtain
According to a report from www.sueddeutsche.de, the insurance buyer of a German industrial group reports that cyber coverage was offered cheaper and in greater quantity by insurers five to six years ago. But since it became clear that the damage caused by cyber attacks is significant, the market for cyber insurance has become tense. Insurers have high minimum IT requirements for the companies to be insured, which leads to fewer offers and greater reservations. The capacity for cyber insurance has decreased, prices have risen sharply and so have deductibles. Industrial companies, especially manufacturing and chemical companies, have difficulty meeting the rigid criteria. Some insurance companies have outdated systems and will...
Financial experts warn: Cyber coverage is becoming more expensive and difficult to obtain
According to a report from www.sueddeutsche.de,
The insurance buyer for a German industrial group reports that cyber coverage was offered cheaper and in greater quantities by insurers five to six years ago. But since it became clear that the damage caused by cyber attacks is significant, the market for cyber insurance has become tense. Insurers have high minimum IT requirements for the companies to be insured, which leads to fewer offers and greater reservations. The capacity for cyber insurance has decreased, prices have risen sharply and so have deductibles. Industrial companies, especially manufacturing and chemical companies, have difficulty meeting the rigid criteria. Some insurance companies have outdated systems and are themselves victims of cyberattacks.
The insurance industry has retreated and is excluding cyber attacks from standard policies. Major damage caused by cyber attacks can leave many companies uninsured. Insurers argue that there is accumulation risk, the risk that many units will be hit at the same time, which is more likely with cyber attacks than with other threats. This has led to an overall increase in prices in the insurance industry.
The insurance company Zurich demands that governments act and create private-public systems to cover cyberattack risks. The industry then founded the insurer Miris to protect itself against cyber risks. The industry is easing slightly as there are fewer claims and new providers on the market. Nevertheless, some industrial companies are growing doubts as to whether taking out cyber cover makes sense.
These developments will have a significant impact on the insurance market, the industry and consumers. Rising prices and limited capacity in cyber insurance will mean companies will struggle to protect themselves against cyber attacks. This could result in a shift of resources towards improving internal IT infrastructure, while at the same time increasing demand for government support to cover cyber risks. The formation of Miris gives the industry more bargaining power, but could also lead to further fragmentation and specialization of the insurance market.
Read the source article at www.sueddeutsche.de