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Cyber Insurance Premiums Keep Rising

Cyber Insurance

Summary Excerpt

What can businesses do to mitigate cyber risks and lower their cyber insurance premiums?

Cyber Insurance Premiums Keep Rising

Here’s How Partnering with an IT MSP Can Help

Ransomware attacks and costly data breaches are causing cyber insurance policy charges to soar. For example, cyber insurance premiums rose by an average of 28% in the first quarter of 2022 compared with the fourth quarter of 20211. And this trend is set to continue throughout 2023 and beyond. So, what can businesses do to mitigate cyber risks and lower their cyber insurance premiums? Partnering with an IT Managed Service Provider (MSP) could be the answer. 

Why Are Cyber Insurance Premiums Skyrocketing?

A tumultuous and rapidly evolving cyber threat landscape, rapidly expanding attack surfaces, and the rising cost of repairing or replacing compromised equipment contribute to cyber insurance’s heightened costs. 

For example, while ransomware is nothing new, it’s now become the preferred attack method for cybercriminals. A recent global study found that 80% of organizations were hit with a ransomware attack in 2021. And worryingly, 60% of those targeted paid the ransom2. With ransomware attacks surging and businesses paying up, insurers are adapting their policies and limiting the amount of coverage they provide to lower the cost of payouts. 

Older IT equipment is also contributing to rising costs. For example, businesses with antiquated tech are an eye-watering 53% more likely to fall victim to a cyber-attack3. And when an attack happens, the cost of replacing this older infrastructure with newer, more secure alternatives falls on the insurer. As a result, insurance companies have raised their premiums to cover the costs. 

Lastly, cybersecurity incidents are becoming extremely expensive, and so the cost of responding to them is also rising. For example, the average data breach cost in the US was $9.44 million in 2022, up from $9.05 million in 20214.

  1. CNBC – It’s Harder To Get Cyber Insurance
  2. Forbes.com – Majority Of Companies Pay The Ransom
  3. Google.com – Cost Of Not Replacing Your IT Hardware
  4. Statista.com – Average Cost Of Data Breach

How Working with an MSP Can Lower Your Cyber Insurance Premiums

Insurance companies are getting more demanding about how they want their clients to protect themselves. Essentially, the most significant contributor to the price of insurance coverage is the policyholder’s risk profile and the insurer’s risk appetite. Increasingly, insurers have lower risk appetites and prefer their clients to have a low-risk profile. 

Working with a managed security service provider can help lower your risk profile in many ways. For example, an MSP can ensure you’re practicing good cybersecurity hygiene. This means appropriate multi-factor authentication (MFA), comprehensive vulnerability management, adequate system backups, mitigation for third-party vendor security risks, and a robust incident response plan. They can also ensure your networking infrastructure meets the increasingly stringent requirements of cyber insurers today.  

Critically, companies without adequate security controls in place are finding it difficult to get coverage or are being quoted higher premiums. 

Are you looking for a Managed Service Provider to help safeguard your systems and drive better results? ProStratus can help! Contact us today to learn more about our wide range of managed services and how we can help you get the most out of your business. Let us show you how our team of experts can take your operations to the next level while ensuring robust cybersecurity. 

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