tal ecosystem, connectivity and cloud resources. Per S&P, coordinated attacks that contributed to a negative credit rating grew by 100 percent in 20202021 compared to the 2018 to 2019 period. The firm also noted that this trend will likely only continue and impacts virtually all sectors. Notably, healthcare, tech, retail and business services companies saw their bottom-line operations impacted during the period, and in several ways. Insurance Premium Hikes With growth in targeted attacks comes a sharp rise in cyber insurance claims. S&P noted that some businesses respond by seeking improved risk-management coverage, while others are subject to heavy rate escalation as a result of their inability to absorb the cost of an attack. Either way, price adjustments and insurance term changes are frequent. Rates are often subject to level of risk, considering the amount that a company has already invested in security standards and infosecurity improvements. Businesses with fewer cybersecurity-related resources now find a less-than-level playing field, while larger, more-equipped companies with more resilient security options at their disposal tend to receive the better rates. This emerging trend has caused some to reinforce their cybersecurity capabilities. For the others, the investment comes through the aforementioned increases. Cyber-insurance providers also can bolster your posture by providing access to resources such as IT services, crisis management and data restoration. While S&P noted that this can be beneficial to your company’s bottom-line numbers, it also can cause potential strain for insurance companies. This leads to – you guessed it – further rate hikes. As a result, S&P observed multiple instances of insurance carriers altering their clients’ terms-of-service to cut back on or eliminate cybersecurity coverage. And with greater retention levels and co-insurance requirements on costly ransoms, the actual coverage for your buck could be lower than ever before. Malicious Financial Aims According to IBM Security, average cost-per-penetration grew by 10 percent in 2021, with increased losses attributed to greater attack sophistication, data quality and sensitivity. This survey noted that data breaches were higher than ever for the year, hitting more than $4 million for the first time in history. In particular, ransomware attacks grew in frequency as techniques such as double-extortion – involving threats to leaked or stolen information – and hijacked operations continue to evolve. Unsurprisingly, average loss per incident was highest among the sectors with the most cyberattacks. S&P also noted increasing instances of strikes against software service providers and, by extension, the firms that regularly purchase and use their services. In a remotework world that continues to transition to cloud-based and other third-party resources, this factor increases the provider’s obligation to upscale its cybersecurity strategy and investment. Increased Financial Pressure There is also a degree of competition with the organizations in play. Developments within the cyber-insurance industry have caused a need to remain cognizant of your own cybersecurity presence to avoid being considered less favorable – and lower rated – than competitors. In this respect, credit harm comes via loss of customer and partner loyalty, supplier strain and damaged reputation. Another factor is the obvious financial impact. The risk – whether due to operational shutdown, necessary security investments, associated regulatory/legal costs or other constraints – can be substantial. According to S&P, new and emerging cyber threats represent not just a roadblock to operations and profits but to the kind of higher downside risk that affects your credit line. And, given attacker sophistication and reliance on cloud services, the risk can only grow. Consequently, your organization can’t afford not to enhance its cybersecurity stance. J 61.9% 31.4% 6.7% d work ale 54.4% 35.8% 9.8% d work tting Source: AON, The Council of Insurance agents and Broker Cyber Insurance Premiums Are On The Rise Average rate increases U.S. cyber insurance 30% 25% 20% 15% 10% 5% 0% (5) Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 17 REMOTE WORK SOLUTIONS rwsmagazine.com
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