The Evolving Cyber Landscape
Cyber risk remains a significant threat to businesses of all sizes in our increasingly connected world. As technology advances, the opportunities for system failures continue to grow, with far-reaching consequences. The insurance industry is responding by adapting coverage terminology to evolving threats, with capacity remaining plentiful as insurers and brokers work to meet client needs.
Key Trends Shaping Cyber Risk
Ransomware and Business Email Compromise
Ransomware and business email compromise continue to be major threats. The increased use of technology, particularly in hybrid work environments, presents potential vulnerabilities if cybersecurity measures are inadequate. According to the Cyber Infrastructure Security Agency (CISA), 90% of successful ransomware attacks in the US begin with phishing attacks. Employee training is crucial to mitigate this risk, as employees need to recognize fraudulent emails and understand their role in protecting the company.
Vulnerability to Non-Malicious Events
Increased interconnectivity and reliance on cloud services mean that outages can disrupt millions of businesses. The 2024 CrowdStrike outage exemplifies this, where a flawed software update caused a global system failure affecting various industries. Cyber policies vary in their response to such unintentional failures, highlighting the need for clarity on coverage terms and conditions.
The Impact of Artificial Intelligence
Artificial intelligence (AI) has both positive and negative implications for cybersecurity. While AI can enhance threat detection and response, it also presents new entry points for cybercriminals and can be used to commit fraud through “deepfake” technology. Insurers and businesses must navigate these complexities together as AI continues to evolve.
Adapting the Cyber Insurance Market
The US cyber insurance market is currently robust, with growing demand and available capacity. Insurers are seeking clients with strong cybersecurity measures, such as multi-factor authentication and regular software updates. MSIG USA, a new entrant in the market, is leveraging its fresh perspective and global reach to offer innovative cyber insurance solutions.
“We must continually work with partners to assess the current and future risk landscape,” said Siobhan O’Brien, head of cyber insurance at MSIG USA. “The past is not always a predictor of the future in cyber, as it’s a unique universe with different needs compared to property or casualty insurance.”
Insurers and businesses must collaborate to identify vulnerabilities, strengthen risk mitigation strategies, and clarify coverage terms to address the evolving cyber risk landscape effectively.
