Dive Brief:
- Artificial intelligence is finding its way into best practices used by businesses to lower their cyber insurance costs, according to cybersecurity firm Delinea.
- In the results of a Delinea survey released Tuesday, 50% of respondents said their company has been able to negotiate a lower cyber insurance rate by leveraging AI for purposes such as threat detection and monitoring.
- “Not everyone gets the same insurance rate,” the report said. “Your rate is determined based on how risky the insurance company views you — your risk profile. In the case of cyber insurance, your risk is influenced by factors such as your technology stack, security controls, and history.”
Dive Insight:
Cyber insurance is the fastest-growing subsector of the global insurance market, with premiums projected to reach $23 billion by 2025, up from about $12 billion in 2022, according to S&P Global Ratings.
Pricing has moderated following sharp rate increases from 2018 to 2022, according to a Thursday Moody’s Ratings report shared with CFO Dive. Cyber insurers are in a better position to manage losses, but an uptick in ransomware and large losses could “prompt higher loss ratios, keeping price declines in check,” Moody’s said.
A July report by Howden, a UK-based insurer, shows a transition to double-digit rate reductions during the 2023-2024 period, following triple-digit rate increases in 2021-2022.
“Pricing is now falling, and competitive forces are yielding more tailored underwriting decision-making that reflects companies’ risk profiles,” the report said.
Despite overall decreases in cyber insurance premiums, many organizations continue to see a rise in costs, according to the Delinea report. Half of respondents said their costs increased since their last application or renewal.
Cyber insurers are now requiring policyholders to submit detailed assessments of their security posture, reflecting the increased maturity of the market, Delinea said.
“The process that companies have to go through to obtain cyber insurance is becoming more and more onerous,” Delinea President Rick Hanson said in an interview.
Delinea conducted a June survey of 306 business leaders with visibility into their organization’s cyber insurance application or renewal process.
