Insurance Journal has said, ‘Cyber Rates Could Double Before 2023, as Attacks Skyrocket.’
Researchers have noticed that the pandemic has caused many financial losses due to cyber-attacks in the past few years. In addition, cyber-attacks have doubled since 2020, resulting in high awareness of cyber risk.
S&P Global Ratings credit analyst Manuel Adam, stated “The trend toward digitalization will inevitably lead to a higher likelihood of cyber incidents. Prices in the cyber re/insurance market could therefore rise sharply over 2021-2023, even doubling in some cases.”
With the substantial increase in cyber losses, insurers noticed a rise in cyber insurance demand during 2020 and 2021 than in previous years, but unfortunately, not a rise in profit. As a result, insurers have created cyber Insurance to protect companies against unexpected cyber risks.
For insurers to profit from insuring these costly cyber risks, they will have to continue restructuring their cyber insurance offerings by increasing rates and adjusting their terms and conditions (T&Cs), especially the exclusions. It is also crucial for insurers to develop their knowledge on the topic to provide the best Insurance.
“Some insurers also intend to reduce their payout limits further, especially where contracts include ransomware or business interruption components. But, at the same time, they hope to increase retention levels through 2021-2023.”
Reports written by Insurance Journal explain that cyber Insurance will be one of the fastest-growing Insurance over the next decade. “The dynamic change in claims pattern, the rise of cyber threats, and huge accumulation risk creates an opportunity for larger reinsurance capacity.”
As a result of this news, the number of insurance companies offering cyber coverage is rising, along with the demand and need.