Ransomware attacks are on the rise, but cyber insurance premiums are declining worldwide, according to a report by broker Howden released on Monday. Despite an increase in ransomware incidents in 2024 compared to the previous year, insurance companies are offering more coverage at lower prices. The report states that this decline is due to businesses becoming more resilient against cyber threats.
Security measures such as multifactor authentication (MFA) have played a crucial role in safeguarding companies’ data and reducing insurance claims. Sarah Neild, head of UK cyber retail at Howden, emphasized the importance of basic security measures like MFA in protecting against cyber threats and investing in IT security and staff training to strengthen overall cyber resilience.
The increased willingness of insurers to offer cyber insurance coverage has also contributed to the decline in premiums. Although global ransomware attacks declined after Russia’s invasion of Ukraine in February 2022, there has been an 18% increase in ransomware incidents in the first five months of 2024 compared to the previous year. Ransomware attacks typically involve encrypting data and demanding cryptocurrency payments in exchange for a decryption key.
Business interruption is often the most significant cost following a cyber attack, but businesses can minimize these costs by implementing robust backup systems, such as using cloud providers. The majority of cyber insurance business is concentrated in the United States, but Europe is expected to experience the fastest growth in the $15 billion global cyber insurance market due to lower penetration levels currently.
Despite the benefits of cyber insurance, smaller firms are less likely to purchase coverage primarily due to a lack of awareness regarding cyber risks. As businesses become more resilient and insurers expand their offerings, the cyber insurance market is expected to continue evolving to meet the changing needs of the digital landscape.
Overall, it appears that improvements in mitigating losses from cybercrime have led to a decline in premiums for cyber attack protection despite an increase in ransomware attacks globally. It’s evident that security measures like MFA have played a crucial role in safeguarding companies’ data and reducing claims while investing