Advisor - Cyber Insurance Rates Ease - for some
Despite many stories about cybersecurity breaches and the malevolent creativity of hackers, the insurance marketplace has recently been delivering some unexpected good news to many cyber insurance buyers. In many industry sectors, well-prepared companies are seeing an easing of rates for this increasingly important coverage.
Several factors have contributed to the rate stability, including:
- More insurers have entered the cyber insurance market as demand for coverage has increased. Business Insurance reports that 65-70 insurers now offer cyber coverage, with an aggregate capacity of about $500 million.
- As insurers get more experience with underwriting the risk and are able to obtain more data about the cost of breaches, they are better able to discern higher-risk companies from lower-risk ones.
- The increased salience of cybersecurity within organizations, and increasingly within corporate boardrooms, is helping to reduce the overall risk from breaches (although of course, any particular breach can be extremely costly).