Cyber Security Insurance Rates Fall as Businesses Improve Their Security

Cyber insurance premiums are falling globally as businesses become more adept in curbing their losses from cyber crime. Insurance premiums to protect companies against cyber attacks rocketed in 2021 and 2022, as the COVID-19 pandemic drove cyber incidents. But premiums have been dropping in the past year. The cyber insurance market saw double digit price reductions in 2023/2024.

Greater appetite by insurers to offer cyber insurance is also leading to price decreases. Ransom software works by encrypting data. Typically, hackers offer a pass code to victims of an attack, enabling them to retrieve the data in return for cryptocurrency payments. Business interruption is usually the biggest cost following a cyber attack, but businesses are able to reduce those costs with better back-up systems, such as through the use of cloud providers.

Most cyber insurance business is in the United States, but growth in the $15 billion global cyber insurance market is likely to be fastest in Europe in the next few years, given lower penetration levels currently. Smaller firms are less likely to buy cyber insurance, partly due to lack of awareness of cyber risk.