Brokers to take a ‘more proactive approach’ to cyber risk education – CyberCube

Software firm CyberCube has predicted that brokers would be taking a “more proactive approach” towards educating clients on cyber risk mitigation this year, as well as requesting renewal information from clients earlier on.

This was according to the insurance advisory firm’s Global Threat Outlook: A Perspective on the Threat Landscape for Q4 2023 report, which was published today (4 September 2023).

The report examined the potential insurance impacts from nation state hot zones that could host future cyber wars, including Russia versus Ukraine, China Taiwan, Iran Israel and North Korea versus South Korea. 

It revealed that the cyber insurance market had stabilised throughout the first half of 2023 in terms of rate increases, with average premium increases slowing.

The report cited that, across Q1 2023, increases for cyber insurance premiums slowed, with the average increase being 8.1%. 

CyberCube expected this slowdown in rate increases to continue through to the end of 2023.

William Altman, cyber threat intelligence principal at CyberCube, said: “Nation state cyber hot zones offer a glimpse into the potential future of cyber war.

“In Q4 2023, CyberCube expects to see nation state cyber threat actors conduct themselves in ways that push the cyber reinsurance industry to consider the limitations and strengths of current war exclusion language deeply.”

Consistency and clarity 

On the flipside, CyberCube said nation-backed cyber threat activity would push the boundaries of war exclusion language. 

The report explained: “While there has been substantial progress and momentum achieved this year, including Lloyd’s of London rolling out an exclusion for cyber war and severe state-backed attacks, the reinsurance market is yet to settle on a consistent approach that is acceptable to all stakeholders.

“CyberCube expects insurers to continue refusing outright to underwrite or provide quotations for accounts deemed to have inadequate cyber security.”

Meanwhile, CyberCube said it expected carriers would continue to focus on the insureds’ implementation of basic cyber risk management measures, such as multi-factor authentication (MFA), as well as measuring good cyber hygiene.

The firm also expected that ransomware and extortion cyber criminal gangs would continue targeting manufacturing, technology and telecommunication sectors. Financial services were also expected to “be in the crosshairs” by the end of 2023.

Additionally, CyberCube noted that threat actors continue to target small and medium-sized targets in sectors with sensitive data, such as law firms.

Yvette Essen, CyberCube head of content, communications and creative, added: “The approaches currently being adopted carry significant uncertainty, mainly due to the complexities surrounding the attribution of cyber incidents and the scarcity of historical parallels.

“By striving for consistency and clarity, we can bolster confidence in the cyber reinsurance sector, shielding it from the impact of outlier events, while reinforcing the overall value of cyber insurance products.