In light of the escalating threat of cyberattacks, the U.S. cyber insurance market is projected to witness toughening conditions throughout 2024, characterized by heightened underwriting standards and escalating rates. This forecast emerges from a recent survey conducted by KYND Ltd, a prominent cyber risk management provider, in collaboration with Intelligent Insurer. The survey canvassed the perspectives of over 100 brokers and insurers, shedding light on prevalent trends within the U.S. cyber insurance landscape.
A striking 64% majority of respondents concurred that the cyber insurance market is set to undergo hardening over the forthcoming 12 months. Concurrently, 57% anticipate a rise in cyber underwriting standards. Moreover, an overwhelming 80% foresee an uptick in cyber risks within the next year, with 31% anticipating a notable surge.
KYND emphasized the imperative for businesses to fortify their digital assets against the evolving spectrum of cyber threats through robust cyber risk management and mitigation strategies. The increasing prevalence of ransomware threats emerged as a focal concern, identified by 46% of respondents as the most potentially financially damaging. Supply chain attacks (17%) and data breaches (14%) also emerged prominently among the noted cyber threats.
The survey underscored the challenges confronting insurers in evaluating a client’s cyber risk profile. Foremost among these challenges were the dearth of accurate, real-time cyber exposure insight (35%), clients’ opacity regarding their cybersecurity practices (21%), and the accurate estimation of systemic loss through modeling (21%).
Endpoint detection and response (29%), cybersecurity awareness (26%), and identity access management (14%) were identified as the pivotal factors in assessing an organization’s cyber posture.
Nevertheless, incentivizing insureds to adopt more robust cyber risk management practices posed significant hurdles, primarily attributed to the perceived lack of risk (37%) and budget constraints (37%). The deficit in expertise constituted an additional challenge, cited by 26% of respondents.
KYND advocated for the adoption of cutting-edge cyber risk management technology and data-driven insights to empower insurers in effectively evaluating and managing cyber risk across their portfolio of businesses amidst the dynamic cyber landscape.
