It’s a matter of when, not if a cyberattack is going to affect an organization, and as cyberattacks become more and more common, the cost of data breaches is rising as well.
Organizations have more options at their disposal than ever before to help protect themselves should a breach become a reality.
CyberMaxx’s first suggestion is to be proactive and allow the 20+ years of experience that have developed the people, processes, and technology to do the job.
If reactive is the choice (not recommended), cyber insurance can play a role, but here’s the catch now, cyber insurance companies are requiring some form of protective measures to be implemented to protect organizational assets before a policy is underwritten.
It’s important to explain the who, what, where, why, and how cyberinsurance and security fit together.
The Cost of a Data Breach
In our line of work, CyberMaxx sometimes will hear a potential new customer ask why they should even improve their security posture in the first place.
The first thing that comes out of CyberMaxx rep’s mouths typically is, “Security…. you need it.”
Ok, maybe it isn’t said that simply. The conversation starts with the cost of what a data breach will cost an organization if they don’t take precautions to better its security. We know both from industry reports like IBM’s 2022 Cost of a Data Breach Report and real-life experiences such as a new customer that came to CyberMaxx AFTER a ransomware situation that cost them millions of dollars.
CyberMaxx works predominantly in the following industries (Source):
- Healthcare – $10.10M
- Financial Services – $5.97M
- Energy – $4.72M
- Entertainment – $3.83M
- Retail – $3.28M
By the way, the healthcare industry was the most expensive for the 12th year in a row. That’s not something to be proud of.
And this is per incident, 83% of organizations studied have had more than one data breach.
Cyber Insurance Industry is Growing
The global market for cybersecurity insurance is expected to explode in the next few years, growing from $11.9 billion dollars in 2022 to an astonishing $29.2 billion by 2027.
The main reason for this growth is the increasing number of sophisticated cyber-attacks that are causing widespread fear of financial losses. In addition, there is a growing need for compliance with various upcoming regulations (Source).
Data security and protection have become a top priority for government regulatory bodies and law enforcement agencies worldwide. In response to this, various initiatives have been put in place in order to tighten data security.
The rise in data privacy laws such as the Personally Identifiable Information (PII) and the Health Insurance Portability and Accountability Act (HIPAA) in the US, the global standard, Payment Card Industry Data Security Standard (PCI DSS), and the European Union’s (EU) General Data Protection Regulation (GDPR) are all persuading insurance providers to focus on cybersecurity insurance measures.
As the world grows more digital, the rate of cyberattacks has increased dramatically – especially during the COVID-19 pandemic and working from home became a reality for most of the workforce. This has created a need for better governance and regulation around data security, which in turn is driving growth in the cybersecurity insurance market.
Cyber Insurance Coverage Requirements
In order to qualify for this type of insurance, policyholders must have certain security measures in place. Insurers take into account a company’s level of risk when determining whether or not to provide coverage.
At this time, there is no standard set of solutions required to fulfill these requirements. Some common examples of such requirements include EDR/MDR and MFA.
Many policy issuers require some form of endpoint detection and response (EDR) in place. In some cases, companies also require managed detection and response (MDR).
Think of it this way, if an organization has an MDR solution in place, the cyber insurance provider sees the organization as less of a liability and more prone to agree to issue a policy.
Up, up and Away: What the Future Holds for Cyber Insurance
During the past year, insurance companies that provide cyber insurance have been making it more difficult for customers to obtain coverage.
Cyber insurance is still available, but organizations that are looking for cyber insurance will have to pay more and meet additional requirements for less protection. This is due to the increasing number of cyber attacks in recent years.
We’ve covered most of this in our Cyber Insurance is Under Attack from Ransomware post. Check it out to learn more.
Cyber insurance = a good business decision.
Managed cyber security = a good business decision.
Does cyber insurance require some form of MDR services? Not always, but it’s becoming the norm that in order to qualify for cyber insurance, an organization is going to need EDR, MDR or some combination at the very least.
At the rate that cyber attacks are increasing and the importance of protecting valuable information within organizational assets, it’s becoming more apparent that having both cyber insurance and an MDR provider is a great combination.