Cyber insurance has become very difficult to obtain for most companies, which has created a great amount of chaos and frustration on the buyer side. In recent months, companies that have gone through their cyber insurance policy renewals have been very surprised when they learn that their policy has either been non-renewed or the premium has increased significantly. Unfortunately, the cyber insurance pendulum keeps swinging in the opposite direction of what buyers and existing policyholders expect, with no signs of slowing down.
Cyber insurance coverage used to be very easy to get and it was not too long ago that insurance carriers had five question applications without much underwriting done behind the scenes. However, this is no longer the case, as cyber risk is embedded in all business operations and cannot be underwritten with just five questions. The application process has reverted to the earlier days of 10-15 page cyber insurance applications, with supplemental ransomware, network business interruption and Log4Shell/Log4j applications now required as well.
Indeed, the cyber insurance application and renewal process is quite intense for all involved. In addition, even after spending hours of gathering the information needed and completing applications, a company still may not qualify to purchase coverage.
Why has the process changed? This is a frequent question I get asked by my existing cyber insurance clients and prospective cyber insurance buyers. First off, cyber insurance has evolved throughout the years and the underwriting process needed a drastic change in order for cyber insurance to remain sustainable. Furthermore, hackers have not let up on ransomware attacks and demands which has led to many cyber insurance claims, high dollar payouts, and limited reinsurer funding which has caused a shortage of cyber insurance capacity. Though cyber insurance is still possible to obtain, all of these challenges have made this coverage become super hard to get.
If you recall when the Colonial Gas Pipeline’s ransomware attack occurred, the gas supply was affected in some states due to the attack which led to a spike in gas prices. The cyber insurance industry is experiencing a similar shortage, since the supply of available liability limits is low and the current demand for cyber insurance is very high.
While the Cyber Data Risk Managers team cannot change the supply and demand challenges of cyber insurance, we can help simplify the cyber insurance quote and buying process for your company. We help make it a much easier process due to our high level of cyber insurance expertise, experience and our ability to access all of the leading cyber insurance carriers. We understand the current market conditions and challenges that companies are faced with today, and are able to help your company navigate the process.
Due to the current cyber insurance market conditions, and challenging underwriting process, it is more important than ever to work with an experienced and knowledgeable cyber insurance broker.
Please reach out to us for assistance with obtaining a cyber insurance quote for your company, or for help with an upcoming cyber insurance policy renewal.