In an era of unprecedented cybersecurity risks, cyber insurance has become mission-critical for nearly every business. The average cost of a ransomware attack reached $4.5 million in 2022, prompting insurers to demand higher security standards from their clients. Consequently, cyber insurance premiums are on the rise, with stricter underwriting requirements and more policy exclusions. In 2022, only 55% of organizations in North America held cyber insurance policies, and a mere 20% had ransomware coverage exceeding $600,000. To navigate these challenges, organizations can proactively enhance their security controls to meet the evolving standards set by cyber insurance carriers.
Strengthening Security Posture
Securing cyber insurance requires a concerted effort and strategy. A robust security posture, effectively managed and measured, serves as the foundation for obtaining the best policies at reasonable rates. Companies that excel at managing cyber risk and maintain strong security controls are more likely to qualify for comprehensive cyber policies. Insurers now conduct thorough assessments of cyber risk during the underwriting process, making it imperative for organizations to provide evidence of their cybersecurity practices.
Before purchasing or renewing cyber insurance, organizations must place heightened emphasis on three areas insurers consider pivotal in assessing an organization’s security posture:
- Endpoint Security: Ensures the tracking of identification points derived from metadata associated with the operating system, web browser, and active plugins. Endpoints can serve as entry points to an organization’s network, making them potential targets for cybercriminals.
- Patching Cadence: Analyzes the speed at which an organization installs security updates to assess its vulnerability risk mitigation practices.
- Network Security: Examines public datasets to identify evidence of high-risk or insecure open ports within the organization’s network.
All these factors are well within the control of organizations, empowering them to proactively mitigate overall risk and elevate their security posture to a higher level of resilience.
Boosting Cyber Resilience
In addition to prioritizing the above factors, organizations should make strategic investments to bolster their security posture and increase their chances of obtaining a cyber insurance policy at a more affordable premium. By focusing on the following areas, a company can reduce its cyber risk, potentially leading to lower insurance costs:
- Quantify Security Risk: Security ratings provide quantifiable, easily understood, and measurable performance indicators. These metrics can be leveraged during executive-level or board meetings to justify security budget allocations and demonstrate the value of security investments. Security ratings can also be used during cyber insurance procurement to showcase the insurability of the organization.
- Implement Continuous Monitoring: Security ratings offer a dynamic, real-time perspective of an organization’s cyber risk. As controls associated with factors like endpoint security, patching cadence, and network security are implemented or pertinent issues are addressed, improvements are immediately reflected.
- Establish an Incident Response Plan: Demonstrating a well-defined incident response strategy is crucial to convince cyber insurers of the organization’s readiness to respond to incidents promptly. The first 24 hours following a breach are critical, requiring immediate action to mitigate further losses, address vulnerabilities, and promptly inform all affected parties.
Conclusion
Cyber insurance is not a substitute for risk management, and policies are not one-size-fits-all solutions. As cyber insurance claims continue to rise, organizations are required to demonstrate their security maturity and risk management capabilities to qualify for the best cyber insurance policies. By adopting a collaborative effort and a strategic approach, organizations can optimize their cybersecurity investments and allocate resources effectively to identify, respond to, and recover from cyber incidents. In a landscape where cybersecurity is more critical than ever, proactive measures are essential to protect businesses against the growing threat of cyberattacks.
