Cyber premiums are rising: Here’s what you can do about it
In survey after survey, the answer from business executives is unanimous when asked to name the risk they fear most: cyber attacks.
The latest Allianz Risk Barometer found 41% of respondents in Australia rank digital incidents such as breaches, IT failure and ransomware crime along with business interruption as the joint top business perils this year.
Cyber security experts are hardly surprised at the findings. Online crime has been growing exponentially in recent years and worsened significantly during the pandemic because of the almost overnight shift to remote working.
The number of ransomware attacks has exploded since the onset of Covid, with hundreds of Australian businesses of all sizes and in all industries falling victim to extortion attempts.
The average cyber claim severity has risen to 3.15 times the 2017 average with ransomware incidents representing 31% of claims.
As a result, cyber insurance premiums have risen sharply to meet the growing cost of claims and the increasing risk. And we expect premiums will continue to rise because the severity and frequency of ransomware claims and other related digital incidents are not expected to ease.
For small businesses, obtaining cyber insurance is going to become more difficult. It is not just rising premiums SMEs have to deal with – they must also demonstrate to insurers they have proper security measures in place to protect their IT infrastructure.
If there are no safeguards, or if they’re outdated or inadequate, the chances of finding an insurer willing to take on the risk are not good.
Many insurers now expect businesses to demonstrate that the security measures they have installed are effective and up-to-date, which can be a big ask as most small businesses aren’t going to have a dedicated in-house IT security team.
But there are many steps SMEs can take to satisfy insurers’ cyber underwriting criteria. Many guides are available to help businesses navigate the cyber challenge, setting out a list of actions they can take to protect their IT systems.
Mitigation is key. As your broker, we understand how your business operates and what you need to do to keep it running securely and smoothly.
We’re in the business of helping you manage all the risks you face – cyber included. In fact, we’ve been advising many clients on cyber as it has grown to become a significant risk. And we know what insurers want.
Talk to us now and we’ll help you work out a cyber security plan for your business so you get the best cover at the best possible rate for your business. This isn’t a risk you can shrug off as unlikely, so don’t delay.
This article originally appeared on Adroit Insurance & Risk Blog and has been published here with permission.
Advisr does not provide advice and does not hold a financial service license (AFSL). All information above has been provided by Adroit Insurance & Risk.