What You Should Know
- Ransomware attacks on people, businesses, and major organizations have risen recently and will continue to rise
- Insurance rates for cybersecurity premiums rose over 25% in 2021
- In 2022, cyberattacks will become more serious than ever and could impact people's safety and livelihoods
Cybersecurity — the process of protecting systems and networks from various digital attacks — saw enormous growth in insurance premiums during the second quarter of 2021. During this time, cybersecurity rates were elevated by more than 25% and are expected to keep climbing.
The rise in cybersecurity-related insurance premiums is evidence of the importance of protection against ransomware attacks.
Why have ransomware attacks increased?
The main reason why insurance premiums for cybersecurity have increased so rapidly is ransomware attacks. Ransomware attacks have increased drastically from 2020 to 2021, and a vast majority of these attacks have been against remote and hybrid work during the global pandemic.
An increase in remote workers means an increase both in the purchasing of cybersecurity insurance and the reliance on cyber insurance coverage if and when there is a data breach.
And while ransomware attacks impact people on individual levels, it is shocking to see how these attacks have also impacted large-scale groups and corporations.
One major target is higher education institutions. Colleges and universities across the U.S. have experienced ransomware attacks that have cost anywhere from $10,000 to $1.14 million to recover from.
The groups that initiate these attacks — often referred to as ransomware gangs — use phishing to break into the systems of universities and corporations alike.
But as IT departments across the globe have seen a workforce shortage, ransomware gangs are finding it even easier to access and steal valuable information.
Because ransomware attacks are only going to increase in both occurrence and severity, cybersecurity is growing more important and more expensive by the minute.
Have cybersecurity insurance rates gone up?
It is easy to see why cybersecurity is in more of a demand now than ever. In retaliation against such vicious ransomware attacks, individuals in both the public and the private sectors have been forced to fight back.
Some groups estimate that cybercrime will cost the world over $10 trillion by 2025. This means that people and organizations that want to take their safety and security seriously have to invest their finances into the endeavor.
In 2021, cybersecurity insurance rates grew by more than 25%. In addition, cybersecurity insurance companies are running a tight ship when it comes to coverage.
Insurers are now asking extremely complex questions about the information security measures that different organizations are taking before agreeing to provide coverage. Additionally, insurance companies are quick to limit coverage for people and groups based on their perceived level of safety.
For example, if a university does not offer two-factor authentication as a part of its security measures, insurance companies may not provide very much coverage, or they may deny coverage altogether.
What will cybercrime look like in 2022?
Unfortunately, there is no reason for cybercrime to decrease in 2022. In all likelihood, ransomware attacks and other versions of cybercrime will continue to increase in the months and years to come.
In 2022, we can expect:
- An increased need for cybersecurity experts
- An increase in cyberattacks against software supply chains
- An increased need for cyber insurance and higher cyber insurance rates
- An increase in cyberattacks through unexpected smart devices like TVs and security cameras
- Global cyberattacks that ultimately cause serious injuries and deaths
- An increase in law enforcement efforts to catch cybercriminals
- Major cyberattacks on international companies in Russia and China
- Large-scale funding for quantum computing to predict and protect against future attacks
Because cybercrime is only growing more serious by the minute, taking the appropriate cybersecurity measures is more important now than ever before. Just as you do when shopping for life insurance companies, you should take your cybersecurity insurance options seriously.
If you're interested in purchasing insurance, be sure to use our free quote tool below to find and compare rates from top companies in the industry.