Report: As Businesses Improve Security, Cyber Premiums Fall

Cyber insurance premiums are falling globally as businesses
become more adept in curbing their losses from cyber crime, even as
ransomware attacks are rising, broker Howden said in a report on
Monday.

Insurance premiums to protect companies against cyber attacks
rocketed in 2021 and 2022, as the COVID-19 pandemic drove cyber
incidents.

But premiums have been dropping in the past year, according to
the annual Howden report. The cyber insurance market saw
double-digit price reductions in 2023/24, Howden said.

Added security such as multifactor authentication has helped to
protect companies' data, reducing insurance claims.

"MFA is the most basic thing you can do, it's like locking the
door when you leave the house," said Sarah Neild, head of UK cyber
retail at Howden.

"Cyber security is a many-layered beast," Neild added, pointing
also to greater investment in IT security, including staff
training.

"On the whole, clients are more robust."

Greater appetite by insurers to offer cyber insurance is also
leading to price decreases, Neild said, even with attacks
rising.

Global ransomware attacks fell following Russia's invasion of
Ukraine in February 2022, as hackers in those countries focused on
the military effort.

However, recorded ransomware incidents rose 18 percent in the
first five months of 2024 compared with a year earlier, the report
said.

Ransom software works by encrypting data. Typically, hackers
offer a pass code to victims of an attack, enabling them to
retrieve the data in return for cryptocurrency payments.

Business interruption is usually the biggest cost following a
cyber attack, but businesses are able to reduce those costs with
better back-up systems, such as through the use of cloud providers,
the report said.

Most cyber insurance business is in the United States, but
growth in the $15 billion global cyber insurance market is likely
to be fastest in Europe in the next few years, given lower
penetration levels currently, the report said.

Smaller firms are less likely to buy cyber insurance, partly due
to lack of awareness of cyber risk, the report added.

(Reporting by Carolyn Cohn;Editing by Alison
Williams)