“By moving work to the home office, the attack surface of companies has increased significantly. Because employees are dependent on personal devices, which are often poorly protected against cyber attacks, and VPN access to company networks, ”states Rene Schoenauer, Marketing Manager at Guidewire Software. Company networks have become more vulnerable.
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Cyber criminals would take advantage of that. Above all, ransomware, in which hackers encrypt the victim’s data and only release it for a ransom, is often used. The problem here is that the sums required are increasing. The reason for this is that blackmail is often given in.
Demand for cyber insurance is increasing significantly
“With the increase in attacks, the demand for cyber insurance and the amounts insured have also increased – actually positive news for insurers,” says Schoenauer. However, this also makes underwriting in the cyber area more challenging.
“Just three years ago, the line of business was profitable with loss ratios of only 10 to 15 percent, but the extent of the damage caused this ratio to rise to almost 50 percent in 2019. This year it is much higher, with some insurers even over 100 percent, ”explains Schoenauer the problem.
Employee behavior more important than technical requirements
The solution for insurers is to know the risks of their insurance customers better. Companies have never been more aware than now of how important protection against cyber attacks is. In particular, the focus is on the behavior of employees – more than technical requirements to avoid or reduce attacks.
In addition, tools could significantly support the underwriting of the industry. Here, analyzing the data could help insurers to precisely assess the risks and adjust their portfolios. For example, the fluctuation of an IT security team or the availability of unused services are meaningful indicators of whether a company has its cyber security under control. “Insurers who can develop this data with the help of behavioral analysis will have a more differentiated understanding of the risk in their portfolios,” says Schoenauer.
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