Blog / Cyberinsurance Claims Are On The Rise
A new report on cyberinsurance claims could cost you.
Although protecting people and their property is supposedly part of their operating mandate, it’s vitally important to remember that insurance providers only offer “protection” against liability, hacking, fires, floods, and the like, because doing so is how they make money. This is most obvious when looking at the automobile insurance industry, where providers have gotten very good at identifying risky behavior and charging accordingly. The premiums we pay are insurers’ primary revenue source, whereas paying out claims is a major cost for them. Unsurprisingly, insurance companies therefore try to maximize the former and minimize the latter. But auto insurance is just one example, and it’s important to remember insurers’ actual priorities when making cyberinsurance claims as well.
That’s partly because of a recently released report about cyberinsurance claims that includes some startling statistics, one of the most notable of which is that 62% of cyber-insured organizations have made a claim within the last 12 months. But that’s not all! Perhaps even more startling is the fact that 27% of them actually made more than one claim in that time.
Contextualizing claims about cyberinsurance claims
To be clear, these statistics aren’t saying that 62% of organizations with cyberinsurance were hacked. Remember, the report is about cyberinsurance claims, which could result from any situation causing an outage or downtime, like a lengthy power outage, flood, or fire, and not necessarily a cyberattack. But because insurance companies are for-profit businesses that need to take in more money as premiums than they pay out in claims to remain solvent, and with so many claims being made, paying out even half of them would represent a significant cost to the industry as a whole.
I’ve written multiple cyberinsurance newsletters in the past about high-profile lawsuits, increasing premiums, and changing industry standards, and this report demonstrates exactly why such changes are being made. Considering the importance of data these days and the sheer volume of online threats, cyberinsurance is not a product insurer’s can realistically stop offering. However, as claims continue to rise, and payouts alongside them, it’s almost certain providers will be hiking premiums in the short term while pushing for changes to the industry as a whole over the long run. Regardless of the timeline though, you can be sure this report and its implications are being digested by cyberinsurance leaders and stakeholders both around the world and close to home.
If you’d like help with anything involving your cyberinsurance, including completing an application, deciphering a policy, or navigating the complexities of making a claim, contact a TRINUS cybersecurity professional and we’ll be happy to help out with some stress-free IT.
This week’s Shakespeare quote comes from The Merry Wives of Windsor: “If money go before, all ways do lie open.”
Be kind to one another, courtesy your friendly-neighbourhood cyber-man.
