Cyber Insurance Market Sees Major Shift with Rising Premiums and Evolving Risks in 2023

The cyber insurance market underwent significant changes between 2022 and 2023, transitioning from a hard market to a softer one characterized by higher pricing, a decrease in claim experiences, and enhanced cybersecurity controls. A survey by Woodruff Sawyer, an independent insurance brokerage and consulting firm, reveals that a majority of underwriters anticipate an increase in cyber risks in 2024, with specific concerns centered around ransomware attacks, supply-chain attacks, and privacy violations.

Ransomware remains the top threat, with 63% of underwriters ranking it as the primary concern for 2024, up from 53% the previous year. Notably, there has been an increase in ransomware attacks that focus on data exfiltration rather than deploying network-encrypting malware. Cyber warfare has also been a significant concern, especially with ongoing conflicts like those in Ukraine and Gaza, raising the risk of cyberattacks spilling over to unintended targets in the private sector.

Artificial Intelligence (AI) is another area of focus, with the belief that while AI may not change the nature of cyber risk, it could intensify the severity of problems when they arise. This underscores the importance of leveraging data science and analytics in making informed decisions when purchasing cyber insurance.

The survey also revealed that 81% of underwriters expect a slight increase in cyber insurance premiums in 2024. Dan Burke, Senior Vice President and National Cyber Practice Leader at Woodruff Sawyer, emphasized the necessity for companies to understand and adjust to these changing risks. He advocates the use of resources like Woodruff Sawyer’s annual Cyber Looking Ahead Guide to gain clarity on trends affecting insurance coverage and rates. This guide aims to empower clients to make informed decisions about their cyber risk management strategies and insurance programs, highlighting Woodruff Sawyer’s expertise in cyber liability.