And on the insurance front, two updates on cyber insurance.
First, new data from the industry on rates. In 2021, rates increased approximately 92% year over year. This year, it appears there is an “increasing sense of cautious optimism” that the sharp rate increases are leveling off as premiums exceed losses and businesses lower their cyber coverage limits.
The average U.S. cyber price per million, which is used to measure insurance rate increases, peaked in December 2021 and has been slowly declining throughout 2022, according to the report from Marsh.
Although cyber insurance premiums are still increasing, they’re doing so at a far lower rate than in 2021.
The report also found that more businesses are seeking lower cyber coverage limits — likely due to soaring rate increases over the last two years. Less than 10% of Marsh clients increased their cyber coverage during the first four months of 2022, compared with more than 20% of clients who decreased their limits.
Additionally, and unrelated, Rep. Elissa Slotkin, D-Mich., urged critical infrastructure entities to consider getting cyber insurance in preparation for ransomware attacks, even as she acknowledged that might be challenging for those with fewer resources.
“We know that small and medium-sized businesses, small and medium-sized governments, don’t have firms to take care of everything for them,” she said, opening a hearing of the House Homeland Security Committee’s panel on intelligence and counterterrorism Tuesday. “Not everyone can afford cybersecurity insurance, which is something I encourage all leaders to look into.”
Why do we care?
I’ll note that I don’t think 92% rate increases are sustainable year over a year anyway, so something had to change. There’s another factor here, too – getting lower levels of coverage.
The number of software companies getting involved is increasing – -I noted two new players who are a combination of software + insurance just this week. Besides vindicating my 2022 prediction on the space, I’m expecting a bit more upheaval to come. At least there will be coverage options.