We’re seeing major changes coming to cyber insurance in 2023. While the insurance market has seen a slight dip in loss ratios across the board (meaning: fewer claims and less damages), the trend is unlikely to continue downward.
From a global perspective, the Ukraine-Russia conflict has caused many cybercriminals to focus their attention away from the West. While the short reprieve has been good for US businesses, we shouldn’t count victory quite yet.
What does this mean for cyber insurance? Here are two predictions:
- We’ll continue to see an increase in premiums over this calendar year. I know, I know… don’t shoot the messenger. But you should be ready to communicate with every client that, while cyber insurance isn’t cheap, it’s a critical non-negotiable for everyone. So much so, in fact, that many leading MSPs are now requiring their clients to carry cyber insurance.
- We’ll continue to see an evolution in cybersecurity maturity requirements from the carriers. Believe it or not, carriers are surrounding themselves with cybersecurity experts to have a better grasp on effective risk-mitigating requirements. They are learning from cyber breaches. We’re now seeing carriers require 24×7 managed EDR, for example. And we’re going to see a shift towards continuous underwriting.
What’s continuous underwriting?
Great question. Think of it as the exact opposite of these annoying 8-10 page security questionnaires. Continuous underwriting will look into the cybersecurity hygiene of your clients and provide discounts to clients who can demonstrate strong cyber hygiene.
Some MSPs tend to revile anyone else looking into their clients’ network. But let me leave you with this thought: I believe it’s a net boon for you. First, this gives you a chance to prove the value of your security controls. No longer should a client wonder why they must pay for such costly controls. Second, the client will be eligible for a discount. Yep, you heard that right. For the first time, your cyber controls will enable your clients to save money. An ROI on security? Here it comes!
Opportunity or Adversity?
While “discounts” may not offset the full cost of needed security controls, guess what… Cyber insurance is now the bad guy, forcing new minimums and a higher floor for security. For MSPs that have been preaching this message for some time, it certainly helps to have insurance come in and reinforce that message.
What does this mean for you, as an MSP going into 2023?
It means there will be new opportunity for you with current clients and prospects that need to solve the cyber insurance hurdles. If you feel you’re not quite ready to handle those hurdles, FifthWall Solutions is here to help.
We have a new Cyber Insurance Exclusive Master Class that’s free for all MSPs to join (once you complete the initial Cyber 101). You see… we are all about education! We’re already getting rave reviews from our first MSP-graduates.
We’d love to have you join!
Be safe — Wes Spencer, VP & Channel Chief, FifthWall Solutions.