Page 56 - Cyber Defense eMagazine December 2022 Edition

Cyber Threats Driving Insurance Claims Activity

By Scott Sayce, Global Head of Cyber and Group Head of the Cyber Centre of Competence at
Allianz Global Corporate & Specialty (AGCS)

Cyber Threats Driving Insurance Claims Activity

In response to the challenging loss environment of recent years, the insurance industry is more diligently
assessing clients’ cyber risk profiles and clarifying coverage areas in a bid to incentivize companies to
improve cyber security and risk management controls.

Our experience shows a number of companies still need to improve their frequency of IT security training,
cyber incident response plans and cyber security governance. Incident response is critical as the cost of
a claim quickly escalates once business interruption kicks in.

It is clear that organizations with good cyber maturity are better equipped to deal with incidents. It is not
typical for us to see companies with strong cyber maturity and security mechanisms suffer a high
frequency of ‘successful’ attacks. Even where they are attacked, losses are usually less severe.

Ransomware threat continues to help drive elevated cyber claims activity

In recent years AGCS has experienced elevated levels of cyber insurance claims, driven in part by the
growth of the cyber insurance market, but also by an overall rise in incidents, including notifications of
ransomware attacks, which are among the biggest drivers of cyber insurance losses. During 2020 and
2021, AGCS received more than 1,000 cyber-related claims per year overall and while claims activity has
stabilized, driven by a more diligent underwriting approach and better risk dialogue with companies, 2022

Cyber Defense eMagazine – December 2022 Edition 56
Copyright © 2022, Cyber Defense Magazine. All rights reserved worldwide.