War Clouds Gather:
One major concern is the tightening grip of war exclusions in cyber insurance policies. Fueled by the Lloyd’s of London mandate, these clauses could expose businesses to cyberattacks stemming from nation-state conflicts. Imagine a rogue drone crashing into your servers courtesy of a geopolitical spat. Farfetched, perhaps, but will your insurance be there to help pick up the pieces?
Ransomware Rises Again:
Ransomware reared its ugly head in 2023, with claims skyrocketing to record levels. This trend shows no signs of abating. Expect continued attacks and the potential legal quagmire of paying ransoms to sanctioned cybercrime groups. Remember, funding terrorism, even digitally, can land you in hot water.
SEC Scrutinizes:
The Securities and Exchange Commission (SEC) is flexing its muscles, implementing new disclosure rules that require companies to report material cyber incidents within four days. This transparency requirement will put chief information security officers (CISOs) under the microscope, demanding heightened vigilance and incident response preparedness.
AI Amplifies the Threat:
While AI may not inherently alter cyber risk, it can be a potent amplifier. Imagine a “malevolent” AI accidentally (or perhaps intentionally) weaponizing a weakness in a widely used software – the domino effect could be devastating. Patching those holes and having the right cyber insurance coverage becomes even more critical in an AI-powered world.
Privacy Peril Spreads:
With 13 states now sporting their own privacy laws, the focus has shifted from healthcare to a wider range of industries. Retail, finance, and beyond, beware – the privacy noose is tightening, and lawsuits are likely to follow suit.
Underwriters Sound the Alarm Bells:
The winds of change are howling through the insurance market, with a staggering 56% of underwriters anticipating a significant rise in cyber risk in 2024. Ransomware remains the undisputed king of the cyber jungle, and expect a slight bump in premiums as insurers adjust to the heightened threat landscape.
A few more takeaways from the survey:
- 56% of underwriters believe cyber risk will increase significantly in 2024.
- 63% of underwriters ranked ransomware as the number one threat.
- 81% of underwriters believe cyber insurance premiums will increase slightly.
- 69% of underwriters expect self-insured retentions to stay the same.
- 75% of respondents believe cyber policy coverage will remain the same.
You can read The “Cyber Looking Ahead Guide” here and to hear directly from Woodruff Sawyer’s cybersecurity specialists, sign up for the “Cyber Looking Ahead” webinar taking place January 23 at 10am PT. Register here.
Source: Looking Ahead: Cyber Liability Insurance Concerns in 2024.