With primary rate changes approaching 50 percent and underwriting questions about network controls becoming more and more detailed, cyber insurers and reinsurers are reacting to an onslaught of ransomware attacks against policyholders and prospects.
Executive SummaryCyber insurers are responding to a rash of ransomware attacks by going beyond short-term fixes of rate hikes and limit cutbacks, adding underwriting questions about network defenses and talking about requiring security features for insurability in order to assure the long-term viability of the cyber insurance market.
But are the actions enough to keep ahead of the bad guys? Did they react too slowly?
Questions about the adequacy of underwriting actions came up more than once at industry conferences in recent weeks. At the Casualty Actuarial Society Seminar on Reinsurance, Brad Gow, global cyber product leader for Sompo International, revealed just how far ahead threat attackers have moved. (Article continues below)
“During their reconnaissance phase, they began to rift through the financial files looking for cyber insurance information [to] identify how much in limits was potentially available,” he reported as he described an escalation in the frequency and severity of ransomware attacks that once focused on target companies with roughly $200 million and are now zeroing in on businesses with $1 billion or more in revenue. “We saw this happening. That changed the game. That sudden increase in severity along with the unchecked frequencies of these attacks really forced underwriting teams and carriers to respond,” he said.