At the end of the year, many companies will be looking over their wins and losses for the year, helping them decide what needs more work and what is going along well. One area that all companies, no matter their industry, can use some help in is cyber awareness and finding ways to cut down on attacks from hackers.
Understanding the trends and movements in the cyber insurance landscape can help organizations get out ahead of threats and liabilities that can ultimately hurt their operations moving forward as well as help cyber insurance professionals communicate the limitations with a target audience and clients.
Cyber Insurance Market
Agents should familiarize themselves with carrier offerings and look for ways to understand the market better moving forward. This can best be illustrated in affirmative and non-affirmative cyber. The former is related to cyber-related coverages, such as data breaches, cyber extortion, and computer attacks, that are specifically underwritten and priced for a policyholder who purchases them in a dedicated cyber insurance policy.
The latter, non-affirmative cyber, refers to the exposures created by cyber perils that can tip off coverage in traditional property or casualty coverages. Examples include property, general liability, and workers’ compensation as well as professional liability.
This kind of coverage has presented a great uncertainty in the cyber insurance market and carriers are identifying possible non-affirmative situations across a wide array of coverages. The industry is looking at how to better understand what is intended to be covered and what is not. Possible changes may include taking out non-affirmative cyber coverage altogether from traditional P&C lines. This would make affirmative cyber coverage the only source of coverage. Also, this could also trigger the need to maintain non-affirmative cyber coverage while separately underwriting and charging for the risk exposure.
Recent Cyber Claims Trends
A leading cause of claims can be related to ransomware and its effects on networks. Everything from school districts to major companies to nursing homes has been hit by ransomware attacks this year alone, costing millions upon millions of dollars.
This kind of malicious software denies access to critical data by injecting an encryption in it until a ransom is paid. Introduced through phishing emails, this kind of cyber attack can take a long time to recover from and not all victims recover fully. As a result, some victims end up paying the ransom to get their files back, but even then the perpetrators may not fully cooperate, holding on to the information for future ransom.
The frequency of ransomware attacks has increased in recent years with the acceleration in digital dependence in everything from banking to mobile technology to education services. Also, criminals have become more tech-savvy in their offenses, especially when targeting smaller and mid-sized businesses with less sophisticated controls in place to protect against this kind of attack.
Local and State Governments
Local government entities and schools, as mentioned above, have increasingly seen their networks fall victim to ransomware attacks. In response, the Department of Homeland Security has been granted to assist entities with risk management advice and response plans by the Senate. If the legislation passes, ransomware attackers could face major federal penalties.
By recognizing the possible pitfalls of non-affirmative cyber and understanding the risks in the market, carriers can help to cut down on the broad reach that ransomware and other risks pose moving forward.
About Genesee General
At Genesee, we strive to provide quality insurance solutions for the Commercial E & S sector. Our longstanding expertise has allowed us to successfully serve your clients for over three decades. Our specialized products include coverages for Transportation, Garage, P & C, Professional, Brokerage Property, Specialty Programs and many more. For more information about our products, we invite you to contact us today at (800) 282-8755.