Back to Blog4 Factors That Drive Down Cyber Insurance Costs
The global cyber insurance market was valued at $13.33 billion in 2022* and is projected to grow to $84.62 billion by 2030.
Companies of all sizes and industries are either starting to leverage cyber insurance or upgrading their existing plans. However, rising costs make it challenging for businesses with smaller security budgets to afford this useful risk mitigation tool. Reports show that direct cyber insurance premiums increased by 50% in 2022 alone**.
In addition, insurers’ stringent requirements make it especially challenging for resource-strapped teams to qualify for cyber insurance. Delinea’s 2023 State of Cyber Insurance Report uncovered that 96% of organizations must purchase at least one security solution before their insurance application is approved.
But there’s good news: there are cost-effective options that can enable your team to meet insurers’ prerequisites and decrease premium costs. By tightening your cybersecurity controls and minimizing your risk profile, your team can go into negotiations with cyber insurance companies confident and prepared to qualify and get the best possible rate.
If your team is considering cyber insurance for the first time or upgrading your existing plan, here are some tips for ensuring you get the best possible rates.
4 Ways to Prepare Before Purchasing Cyber Insurance
The less risk your company incurs in day-to-day operations, the more likely you will meet prerequisites and obtain the best cyber insurance rates. If your team has invested in tangible cybersecurity controls and best practices, insurers will be more likely to approve your application for insurance and offer a lower rate.
Here are four ways to prepare before you purchase cyber insurance:
1. Proactively Conduct a Thorough Risk Assessment
Most insurers require that you provide as many details as possible about past and present incidents and current risks. Conducting a formal risk assessment is a great way to prove your organization’s commitment to cybersecurity.
Organizations often leverage the NIST framework to conduct their risk assessments, using its five tenets to ask the following questions:
- Identify: Do we understand our organization’s security posture and its potential risks?
- Protect: Have we implemented security tools and processes that align with these organization-specific risks?
- Detect: Do we have methods in place for detecting incidents in real-time?
- Respond: Do we have plans in place to respond to these incidents?
- Recover: Are there plans in place for recovering from incidents?
Some organizations also leverage ISO 27001, which provides detailed guidance for assessing access controls, logging and monitoring, incident management, and other security controls that insurers like to see.
2. Implement Preventative Measures
As Security Magazine highlights, many of the prerequisites for obtaining cyber insurance are preventative measures.
A few proactive ways to guard against cyber-risk include:
- Backup and disaster recovery to ensure that your team can quickly recover critical data in the case of an attack such as ransomware
- SIEM logs for monitoring your entire environment for suspicious activities or early signs of attacks
- Identity and access management (IAM) and privileged access management (PAM) to keep track of all users and prevent unauthorized users from entering the system
- Patch management to keep all software up to date with the latest bug fixes and security improvements
- Centralized reporting with a tool like XDR to consolidate security activities into a single location and make it easier for teams to upkeep strong security controls
Lean organizations should search for a single security solution or small stack that provides these functions to reduce costs and complexity.
3. Build and Document Your Incident Response Plan
Showing your cyber insurance provider a formal incident response plan can also help lower your premium. It demonstrates that your organization has the proper processes in place to respond quickly and effectively in the case of a cyber incident.
Here are a few recommendations for building an effective incident response plan:
- Make a communication plan by documenting details such as real-time reporting methods, key team members’ contact information, and asset inventories
- Create guidelines for detecting and analyzing different categories of incidents, with a focus on determining which assets, network segments, etc., were impacted by an incident.
- Establish containment, eradication, and recovery procedures such as isolating the threat, efficiently gathering evidence of the incident, performing root cause analysis, restoring affected assets from backups, and resetting passwords.
- Prepare resources for conducting post-incident activities such as quantifying impact and collecting lessons learned from personnel interviews and quantitative data.
Blumira supports incident response with security playbooks, which provide guidance for users to uncover and remediate the root cause of each security alert.
4. Demonstrate Commitment to Continuous Improvement
Cyber insurance providers also take notice when your organization prioritizes continuous security improvement. There are a few ways to demonstrate your commitment to continuous security learning and improvement. Security log retention proves your commitment to gain visibility into your systems over time and better understand your unique risk profile. Monitoring and improving security response metrics like mean time to respond (MTTR) and mean time to detect (MTTD) and meeting industry-recognized compliance standards also show your willingness to continuously improve.
In addition, cyber insurers like to see that you’ve provided your employees with repeatable, well-documented training programs that educate on:
- Identifying phishing/social engineering
- Using strong passwords and two-factor authentication
- Adhering to the principle of least privilege
- Recognizing signs of an attacker, such as unauthorized network scanners, sudden removal of antivirus software, etc.
How Blumira Helps Minimize Risk for Lean Businesses
With the proper security controls in place, your organization can be prepared to defend against cyber attacks and get the best possible rate on cyber insurance. Our platform provides the help your IT teams need to decrease your organization’s overall risk and stay ahead of threats.
Blumira simplifies security and reduces manual effort for resource-strapped teams. We improve efficiency with automated logging, endpoint security, 24/7 threat monitoring, detection, and response — all from a single platform. We help IT teams meet cyber insurance prerequisites and proactively prove the effectiveness of their security efforts by detecting and responding to threats 99.4% faster than the industry average and providing advanced reporting and dashboards.
Check out our Cyber Insurance Reference Questions & Answers to see how we help customers respond to common cyber insurance concerns.
* https://www.fortunebusinessinsights.com/cyber-insurance-market-106287
** https://news.ambest.com/newscontent.aspx?refnum=250256&altsrc=175