Why are cyber premiums increasing?

After a few years of inexpensive premiums, the cost of cyber cover is growing.

Image for article: Why are cyber premiums increasing?
Colin Fox explains the main reasons why cyber premiums are increasing significantly:
Changing Cyber Risk Landscape

The cyber risk threat landscape is constantly evolving. Insurers are seeing an increase in claims, which is impacting on premiums being charged and policy coverage being offered. This form of insurance is now perceived as both long tail (e.g. in terms of liability for a data breach ) and short tail (e.g. a ransomware attack and data restoration costs) . Previously the claims experience of the cyber market was relatively benign. An increasing number of claims, in a relatively short space of time, have meant that insurers needed to take action.

Cyber Maturity

With the escalation in claims activity, insurers are placing an increase in focus on the controls that a business may have in place for their cyber security and the exercising of robust risk management procedures. There are now certain minimum requirements that are needed such as MFA (Multi-Factor Authentication) being in place before they will consider offering renewal terms. If the overall cyber security level of an organisation is of a low standard, this will adversely affect the premium and terms, and may even result in the insurer not offering renewal.

Impact of Ransomware Attacks

Insurers are still seeing ransomware attacks as the predominant cause of cyber-attacks – both in frequency and severity but additionally in sophistication as ransomware gangs continue to develop new strains of malicious software. Data exfiltration during a ransomware attack is also now becoming the norm.

Supply Chain

Supply chains that an organisation may rely upon to trade can be compromised when hackers focus on vulnerabilities of the provider within their computer network . This will impact on an organisations ability to transact normally and result in a business interruption loss that can be costly and damage the reputation of the business.


The Ukraine war has also provided a renewed focus by insurers on the breadth of coverage offered, with particular emphasis on war exclusions and the extent to which this may bring a systemic risk to their book. Such systemic risk and possible aggregation for cyber insurers could question the long term sustainability of this form of insurance.

Market Economics

The cyber market is contracting due to the proliferation in claims activity, some insurers have withdrawn from the market or reassessed their appetite for this class of insurance. The reduced supply and increased demand for cyber insurance is pushing premiums up. The increased cost of reinsurance (where insurers spread their risk amongst other insurers) is also a driving factor.

Colin Fox
Cyber Insurance Consultant, Ntegrity

Back to news


Ntegrity chartered mark
Ntegrity affiliation mark for Cyber Essentials
Ntegrity affiliation mark for Prime Partners
Ntegrity affiliation mark for Gilchrist