According to John Farley (pictured), managing director of Gallagher Global Brokerage Cyber Practice, there were three main factors contributing to the difficult market conditions for cyber insurance in 2021.
“The 2021 hackers really turned their attention to IT supply chain attacks,” he explained. “They were chasing the main goals of the supply chain. [such as software providers and email platforms]If they attacked them and successfully broke into their network, they wanted thousands, if not millions, of others. Such types of attacks have made the underwriting community very nervous. Because even the highest risks in their books can be exposed to this … it’s really beyond their control.
“Ransomware has continued to evolve. We saw a huge amount of blackmail-we are talking about the numbers 6 and 7. And in fact, the ransomware itself-the type of attack. [cyber criminals] Undertaken-It has actually evolved in the form of stealing data during a ransomware attack and threatening to expose sensitive data. They didn’t just freeze your data and want you to pay. They say: “If you don’t pay, I publish your employee’s HR file or your client’s IP.” The [bad actors] I really excited the game there and it was quite successful. As a result, losses in ransomware attacks have reached their limits. “
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The third factor Farley described as “a hidden cyber risk for many” was privacy regulation. Companies are under great pressure to comply with national and international data privacy laws. If they violate the data subject’s right to privacy, they may be sued through regulatory agencies or class action proceedings. Regulators began paying more attention to this in 2021, causing an increase in proceedings. This could continue in 2022.
“These trends continue this year,” Farley said. “Interest rates continue to rise, [with] Higher rates for everyone, but will level off for some. Underwriters are quite nervous about certain industry sectors.Municipalities are probably what they are most concerned about [because] They usually suffer from many attacks because they don’t have the budget to hire cybersecurity professionals, or at least the best professionals. Beyond Municipalities … Higher education, manufacturing, technology, and medical care are really hit hard.
“That said, everyone is hit. We see a rise in rates. We may see it. [rate] It will level off to some extent, but as long as exclusive words are added to the policy, retention will be high and coverage may be limited. The price is not the only story. Keep in mind that it’s also what you’re getting. “
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According to Farley, almost all cyber carriers now have multi-factor authentication (MFA), Remote Desktop Protocol (RDP), data backup practices, patch management, employee training, and more. The more attention a company pays to cybersecurity management, the more likely it is to receive better coverage and pricing.
“Multi-factor authentication: that’s [in place] Network-wide and organization-wide-for employee email, privileged access, and remote access. If you haven’t implemented MFA, it’s very likely that you won’t be able to get a quote, so that’s probably the most important thing, “Farley said.
“Endpoint detection and response: Make sure you have technology in place to let you know that a bad guy has entered your network the moment they break into your network. This will allow hackers to move laterally through your network. You can kick it out before you do it. It’s really important. Patch Management: When an exploit is revealed, underwriters want to know that they can pivot very quickly to patch their vulnerabilities. . “
Other important risk mitigation mechanisms include: A data backup that is kept separate from the primary dataset and can be deployed within a predetermined time frame. Employee training to minimize human error associated with phishing attacks and cyber fraud. Privileged account management. This gives administrators a high level of control over the most sensitive data in their network.
“Incident response planning is important [and] Identify the key players in your incident response team. It has a major role and responsibility in the event of an attack, “Farley added. “It needs to be identified in a written plan. That plan also needs to work with external vendors. You need vendors that come with cyber policies. They work very closely with the internal incident response team. So make sure you know who these experts are, and practice that plan, do some tabletop exercise, and make sure it’s done at least once a year. “
Cyber insurance: major loss factors and how to mitigate them
Source link Cyber insurance: major loss factors and how to mitigate them