COVID-19's impact on cybersecurity is undeniable.
From cyberattacks on unemployment systems and the healthcare industry, to the security risks associated with remote work, SecureWorld has covered how these rapid changes have developed into a "Wild West" threat landscape.
But how are these new developments impacting cyber insurance rates? And how will we cope with them in a post-coronavirus world?
COVID-19 is raising cyber insurance rates
At first glance, the driving force behind higher cyber insurance rates would seem to be more incidents leading to more expensive policy premiums.
In part, that's true. But it's only one piece of the puzzle, according to Stephanie Snyder, senior vice president and commercial strategy leader at Aon.
"COVID-19 is accelerating the transition of the cyber insurance market into hard market conditions, where we are seeing premium increases become more of the norm," Snyder said.
Why is this transition happening alongside coronavirus? Snyder says remote work is one factor:
"We are still seeing steady ransomware attacks, and what's interesting is that the incidents are taking companies longer to respond to because companies are more widely distributed while working remotely. What I anticipate from that is larger losses because of outage times being longer as companies try to get back up and running."
And remote work has other potential cyber insurance consequences. Beyond the increased security risk, Insurance Business touches on what might occur as employees move back into the office:
"As organizations emerge from lockdown, there is another concern that vulnerabilities that occurred while teams were working remotely may only be recognized on their return, which presents a lot of uncertainty around potential claims.
Cyber insurance has typically been a competitive market with new insurance carriers coming in and driving down overall rates and expanding coverage, but Snyder says with the continued frequency and severity of tech E&O claims and the added question mark of COVID-19, carriers are re-evaluating how much capacity they’re willing to put up."
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