Large-scale digitization opens up opportunities for businesses and, at the same time, increases the probability of cybercrimes.
Cybersecurity has always been an issue for large enterprises. Today, it requires additional protection, especially with a continued intensification of this alarming trend.
2020 might have been a successful year for cyber-safety insurance, but the crisis that followed after the spread of COVID-19 hit it harder than expected. The companies opt out of additional insurance even though they need it. And the cybercrime wave is unlikely to stop.
The problem seems to particularly сenter on insurance providers. Attacks increase the demand for insurance, but they also cause a supply issue. The level of interest in backing cyber-related liabilities is dropping due to the brief historical background of loss in the sector, lack of predictability, and shortage of funds.
It is no secret that the digital environment is sensitive to economic changes. And cybersecurity, in particular, is not any different.
Businesses’ increased vulnerability and exposure to cyber risks result in massive confusion about their purchasing capacity and actual needs. Is there a way out?
At this point, cyberspace is not getting any more secure. It means that the demand and risk are here to stay, and the companies will have to turn to insurance to manage it. Unfortunately, there is no quick remedy for stabilizing the market and making the cyber-safety insurance sector more stable.
The market dynamics indicate that the power of demand will eventually put things back on track. But while cybersecurity is essential to uninterrupted business operation, there are greater things at stake like managing, understanding, discussing the threat environment, and adapting to it. Otherwise, the ever-evolving cyber risks will keep on keeping on.
Victoria is a Content Writer at American REIA, covering the latest industry news and various insurance topics, including auto, home, health, and life insurance.