Report reveals cyber insurance premiums decline despite rising ransomware attacks

Despite a rise in ransomware incidents, cyber insurance premiums are decreasing globally as businesses enhance their cybersecurity measures. Howden’s report attributes this trend to improved data protection practices, like multifactor authentication, and highlights Europe as a rapidly growing market due to low current penetration levels.
Ransomware concept - Computer Keyboard with red RANSOMWARE. Hacked virus hijacked cyber attack

A report by Howden has stated that cyber insurance premiums are on a downward trend worldwide despite the rise in ransomware attacks as businesses are upping their capacity to mitigate losses from cybercrime. The surge in insurance premiums first arose during 2021 and 2022 because of COVID-19 pandemic and an increase in cyber incidents but has since declined in the following years. The cyber insurance market witnessed significant price reductions in 2023/24, attributed to advancements such as multifactor authentication that significantly enhanced data protection, decreasing insurance claims.

Sarah Neild, the head of UK cyber retail at Howden, highlighted the fundamental role of multifactor authentication in securing data, comparing it to a basic security measure akin to locking the door when leaving the house. Neild stressed the multifaceted nature of cybersecurity, underscoring the importance of increased investments in IT security, including employee training. 

Following Russia’s invasion of Ukraine in February 2022, global ransomware attacks saw a decline as hackers from these regions shifted their focus to military activities. However, recorded ransomware incidents surged by 18% in the first five months of 2024 compared to the previous year—ransomware functions by encrypting data where hackers typically offer victims a decryption key in exchange for cryptocurrency payments. While business interruption remains the primary cost after a cyberattack, businesses can mitigate these expenses by instituting improved backup systems such as cloud backup systems.

Although most of the cyber insurance business is concentrated in the United States, the report anticipates that the fastest-growing market will be Europe in the coming years due to lower current penetration levels. Finally, the report finds that smaller firms exhibit lower rates of cyber insurance adoption, which can partly be attributed to a need for more awareness regarding cyber risks.