The rise of Cyber Insurance: from optional extra to essential cover
Ransomware and AI-enabled scams are accelerating, pushing cyber insurance from a nice-to-have to a core part of business resilience.
In today’s digital-first world, businesses face an ever-growing range of cyber threats. From data breaches and ransomware attacks to phishing scams and denial of service attacks, cybercrime has evolved into a multi-billion-dollar industry, targeting organisations of all sizes, in all industries. As a result, cyber insurance has transitioned from being a niche product to an essential component of any business's risk management strategy.
The growing threat landscape
Cyberattacks are increasing in both frequency and sophistication. According to the National Cyber Security Centre (NCSC) in its 2024 Annual Review, ransomware attacks have surged significantly, with global cyberattacks becoming more frequent and severe. This trend is expected to increase further with advancements in AI and Supercomputing creating new threats and enabling more sophisticated attacks, for example, deepfake social engineering attacks and adaptive malware.
The consequences of a cyberattack extend far beyond the immediate financial impact; they can lead to prolonged interruption of a business and its services, legal liabilities, regulatory fines and irreversible reputational harm. The average cost of a data breach alone now averages millions per incident, making cyber insurance a critical safeguard.
Why Cyber Insurance is essential
Unlike traditional insurance policies that protect against fire, theft or general liability, cyber insurance, as well as providing financial support, are the panel of incident response services, such as forensics, legal and crisis management, that can be immediately deployed in the event of a cyber incident.
A well-structured cyber insurance policy will also include:
- Financial Losses: covering costs related to payment of ransom demands, business interruption, and recovery expenses
- Legal and Regulatory Expenses: notification costs, legal fees, and penalties associated with data breaches (where permissible by law)
- Reputational Damage Control: supporting PR efforts and customer communication to restore brand trust
An evolving and adaptive market
The cyber insurance market is continuously adapting to the changing threat landscape, with Insurers regularly refining their policies to ensure businesses receive comprehensive protection. However, those businesses wishing to obtain the broadest level of protection, at competitive premium levels, will benefit from being able to demonstrate robust cyber security and controls.
Introducing CyberPrepare
Recognising the urgent need for organisations to assess their cyber risk posture, PIB Risk Management has partnered with STORM Guidance (the UK's leading provider in cyber incident response and risk management services for the insurance market), to offer CyberPrepare, a low-cost tool that quickly enables organisations to test and assess their cyber resilience.
Available via a secure online portal, CyberPrepare includes an assessment of fundamental security and controls together with a non-invasive domain scan that provides an attacker’s eye view to help identify security gaps. A resilience report is also produced highlighting the organisations cyber preparedness and security posture - setting out findings, observations and insights.
Talk to PIB
Given today’s rapidly evolving digital risks, protecting your organisation against cyber threats has never been more critical. To learn more about CyberPrepare and how it can enhance your business’s cybersecurity posture and resilience to attack, visit the CyberPrepare website.