Adrian Johnson
TLDR:
Key Points:
- Cyberinsurance premiums have been decreasing by about 15% since 2022.
- The decrease in premiums is more likely due to insurers correcting their mistakes rather than improvements in insureds’ security.
The article discusses the decrease in cyberinsurance premiums and the reasons behind this trend. Despite claims that businesses have become better at curbing cybercrime losses through improved security measures like multifactor authentication, the reality is more complex. The initial rapid increase in premiums in 2021 and 2022 was due to insurers underestimating cyber risks. Insurers responded by redefining clauses, increasing denials, and escalating premiums. Now, with better actuarial understanding and a matured cyberinsurance industry, premiums are decreasing as insurers adjust to market conditions. However, the insurance market’s cyclical nature may mean that premiums could increase again in the future as the market fluctuates. It is important to understand that the insurance industry is designed to cover losses, not prevent breaches, and changes in premium rates are more reflective of insurers’ corrections rather than improvements in overall security.
