Is The Cyber Insurance Industry on the Brink of Collapse?
Excerpt from Industry Today – May 25, 2022
The industry suffered claims of almost $7 billion in 2021 and now looks to take the lead in reducing client risk.
The cyber insurance industry, battered by a seemingly unending onslaught of claims, is reaching a breaking point. According to the FBI’s latest Internet Crime Report, cyber-related complaints have increased by more than 180% over the last 5 years, resulting in $18.7 billion in losses. Last year, some carriers ended up paying out more in claims than they received from premiums. As a result, the industry is now demanding that customers reduce their exposure or face steep price increases or quite possibly cancellations.
Dramatic Rise in Attacks
Many experts feel training is crucial in order to slow down successful phishing breaches, which account for an overwhelming majority of attacks. Phishing, along with other forms, like vishing – over the phone, smishing – via text, and pharming – visiting fraudulent websites, often leads to the deployment of malicious software, like ransomware.
A growing number of new regulations now require a number of industries to add ongoing education to their security programs, but some top executives question whether these generic training programs work as advertised.
“Our view is training that does not impact risky behaviors is a waste of time and money for our clients,” says Kirsten Bay, CEO of Cysurance – a US-based cyber insurance company that writes policies to protect against privacy breaches, identity theft, system damage, and other cybercrimes.
Personalized Behavioral Training
“What we look for is to develop a ‘culture of compliance,” remarked Mark Weir, of LCM Solutions, a Canadian consulting firm. “However, what helps one person, may not be helpful to another. So, this idea of first evaluating the psychology of the individual and then educating that person based on their natural propensity is a game-changer. I think it is going to be what keeps the cyber insurance industry afloat.”
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