80% of firms have used their cyber insurance, survey claims

Nearly 80% of organisations have had to use their cyber insurance policy, underlining the need for cyber cover as increasingly squeezed businesses weigh up which expenses they can afford to keep.

The survey, commissioned by Delinea and conducted by Censuswide, asked 300 US-based IT decision makers about their organisation’s approach to cyber insurance. Nearly 70% of organisations have applied for cyber insurance, the survey shows. Respondents cited risk reduction as the main driver for applying (40%), although one-third of decision makers said that pressure from executive management to have cyber cover in place was the primary motivating factor. A quarter of respondents listed recent ransomware incidents as the main decision driver behind their organisation applying for cover.

More than 90% of those surveyed say that they receive adequate budget to purchase cyber insurance cover, indicating a change of culture at board level and an understanding of the need for cyber insurance. But it appears that relatively buoyant demand is taking its toll on insurers: 35% of organisations who had applied for cyber insurance claimed it took longer than three months to get approved, while 75% of respondents said their premiums had increased in their last renewal. And insurers are pulling back on what they include in cover, with just 30% of organisations surveyed saying their policy covers critical risks such as ransomware.

‘Organisations scrambling to buy or renew cyber cover’

The findings highlight the importance of cyber cover, particularly to larger organisations, as many businesses deal with rising rates and spiralling inflation. There have been warnings about the affordability of cyber cover for SMEs while some businesses will doubtlessly deprioritise cyber insurance or cancel their policy altogether in the coming months.

Art Gilliland, CEO of Delinea, says: “Executives and boards use cyber insurance to lower the costs associated with potential breaches. As a result, most organisations are scrambling to buy or renew a policy, even as the insurers pull back on what they will cover and simultaneously raise the price of coverage.

“Our report shows that insurers are increasingly requiring organisations to implement a broader set of security controls to try to reduce the number of customers leveraging their policies. With 80% of companies leveraging their insurance policies, it is expected that more advanced solutions are needed.”