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Cyberinsurance Policies: Prices Up by 130% in Q4 2021

February 16, 2022

We had some big increases in the price of cyberinsurance policies (with less coverage I might add) but the title of this post is simply astonishing.

Financial Times reported (sub. req.) on February 13 that , according to global insurance company Marsh, the price of cyberinsurance in the US grew by a whopping 130% in the 4^th quarter of 2021.

Adrian Cox, chief executive of London-listed Beazley, said that prices will continue to increase as insurers respond to rising claims: “In the last two years cyber criminality has become a real problem in the corporate world through ransomware . . . insurers are reacting to that and working out how to underwrite it,” he said.

 “The dollar impact [on insurance companies] has been severe,” said Cox, adding that some insurance companies have decided to stop writing cyber insurance altogether.  

Cox believes that companies must manage cyber risk better and governments must crack down on cybercriminals. “If cyber criminality continues unchecked, [insurance] will become unaffordable,” he warned. “Governments are taking the risk more seriously — it is a public-private partnership. Governments have tools to deploy against these gangs and they are starting to deploy them.”

Nevertheless, there may be limits to what insurers can cover. Speaking to the Financial Times last week, Mario Greco, the chief executive of Zurich, said: “A connected economy offers lots of opportunities for cyber attacks.” A major cyber risk, he added, “is something only governments can manage”.

The steep increase in the cost of cyberinsurance comes against a backdrop of commercial insurance prices rising 13 per cent in the final quarter of 2021.

Greco noted also that the cost of reinsurance — the coverage that insurers purchase to protect themselves — had increased, and that some insurers had withdrawn from commercial insurance, meaning there is less capacity in the market.

Basically, we have been watching a train wreck in cyberinsurance, with no end in sight.

Sharon D. Nelson, Esq., President, Sensei Enterprises, Inc.
3975 University Drive, Suite 225, Fairfax, VA 22030
Email: Phone: 703-359-0700
Digital Forensics/Cybersecurity/Information Technology
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