Cyber Change Comes at You Fast - Are Insurers Ready?

May 02, 2017| Von Molly Corbett and Mindy Pollack | Cyber Risk | English

Region: North America

Have you seen any exposure emerge and evolve as quickly as Cyber has?

We follow many emerging issues in the marketplace, but Cyber has them beat in both speed and ferocity of change.

Just take a look at the latest statistics:

  • In 2015 Malware accounted for less than 2% of emails with malicious links or attachments. By 2016, however, infected emails were 97% of the total.1
  • The median cost of a small (“nano-size”) business breach grew 53% over the past two years.2
  • Ransomware attacks in 2016 were more than 100% higher than in 2015, and some experts report as much as 400% more.3

Early Cyber insurance products were focused mainly on first-party breach response. Today most policies are likely to include half a dozen or more parts concerning coverage. Data breach response remains the core exposure, representing 75% of all payments under Cyber policies. But the addition of Extortion, Network Attack and other protections reflect the evolving risk landscape presently facing small businesses.

That raises the question of what Cyber exposure will emerge next and lead to future insurance product needs. One way to prepare is to consider the predictions of leading firms in the space:4

  • Increase of Ransomware and other attacks on mobile devices
  • More attacks on “smart devices” and the IoT (Internet of Things)
  • Data manipulation as well as data theft to increase damage
  • More targeted Distributed Denial of Service (DDoS) attacks

One prediction got our immediate attention: more targeted attacks and breaches of small- to medium-size enterprises (SMEs). We tend to associate small businesses with human negligence, such as losing a laptop or mistakenly mailing personal information. These “low tech” causes may still dominate, but we will see more cyber attacks - typically associated with malware and hacking - moving into the SME space. Unfortunately, most SMEs lack adequate resources to fend off these attacks.

We don’t expect the speed of changes in Cyber exposure to slow down. Are insurers keeping pace?

Learn more from our video on changes in Cyber exposure and be on the lookout for an upcoming blog on small business Cyber exposure.


  1. PhishMe.
  2. NetDiligence.
  3. SonicWall, beazley.
  4. Trend reports we read can be found at: Information Age, CSO, FireEye, CIODive and eWeek.


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