Moody’s Investors Service Inc in a report said that cyber insurance prices are rising due to the surge in ransomware claims. The report also claimed that a low double-digit rate increased across the board whereas a steeper increase was observed for loss-hit accounts.
With this many of the insurance companies have started monitoring new business and preparing with better criteria for the underwriting of the same.
“Some carriers are also reducing limits and raising attachment points, but for now, capacity in the market remains relatively stable,” stated the report. “A challenge for insurers is the potential for risk accumulations given that the same event can affect multiple policyholders across geographies and industries.”
The report further explained that there are several difficulties in underwriting cyber insurance and some of which include a lack of uniform policy wording and evolving nature of the risks. These difficulties are creating a shift in target for cyber models’ parameters in insurance.
According to the report, it will take some time for insurance to understand the scope and nature of the attack and establish which of their customers had exposure to the Sunburst cyberattack perpetrated through SolarWinds software.
Many of the insurance and reinsurance companies have started reducing their silent cyber exposure either by introducing cyber sub-limits or exclusions in traditional policies.