By Zainab Iwayemi
There has been a rise in the prices of cyber insurance in recent times on the back of rise in ransomware claims, causing brokers to report low double-digit rate increases across the board in addition to steeper increases for loss-hit accounts, a report by Moody’s Investors Service, a global integrated risk assessment firm, has revealed.
“Some carriers are also reducing limits and raising attachment points, but for now, capacity in the market remains relatively stable,” Moody’s said.
Highlighting challenges associated with cyber insurance, the risk assessment firm pointed out diverse policy and unstable risk nature which creates a shifting target for cyber models’ parameters.
“A challenge for insurers is the potential for risk accumulations given that the same event can affect multiple policyholders across geographies and industries,” the report said.
The report added that it will take time for insurers to establish which of their customers had exposure to the Sunburst cyberattack perpetrated through SolarWinds software,
“We expect underwriters will evaluate the scope and nature of the attack, adjust underwriting – for example, looking at vulnerabilities related to supply chains and third-party vendors – and help clients address susceptibilities to future attacks,” Moody’s said.
Meanwhile, the Moody’s report also indicates that many commercial insurers and reinsurers are reducing their silent cyber exposure by shifting cyber risk to standalone policies or introducing cyber sublimits or exclusions in traditional policies
“Insurers remain well-capitalized to absorb the increasing loss experience related to cyberattacks” the ratings agency said.