Quality of cyber defence impacts insurability

A new report from Sophos details how the quality of an organisation’s cyber defences impacts its insurability, premium costs and policy terms.

According to the research, 95% of organisations that took out cyber insurance in the last year say the state of their defences had a direct impact: 60% said it impacted the ability to get coverage, 62% said it impacted coverage costs and 28% said it impacted the terms of their policy.

The Critical Role of Frontline Cyber Defenses in Insurance Adoption report also found that cyber insurance adoption is now the norm, with 91% of surveyed organisations having coverage. An additional 8% reported that they don’t currently have coverage but plan to obtain it in the next year.

Insurance coverage plays a role in an organisation’s ability to recover from an attack:

• Organisations with cyber insurance are more likely to be able to recover data that was encrypted in a ransomware incident: 98% of those with a standalone policy, and 97% of those with cyber as part of a wider insurance policy, were able to recover encrypted data after a ransomware attack, compared to 84% of those without cyber coverage.
• Organisations with standalone cyber insurance policies are almost four times more likely to pay the ransom to recover encrypted data: of those that had data encrypted in a ransomware incident in the last year, 59% of those with a standalone cyber insurance policy paid the ransom, compared with 37% of those with cyber as part of a broader insurance policy and 15% of those that don’t have cyber insurance
   

“The calibre of an organisation’s cybersecurity defences in protecting against active adversaries is critically important. Organisations need to properly configure and manage security technologies and also effectively respond to threats — and that requires an expert talent skillset,” said Raja Patel, senior vice president of products at Sophos.

“Industry-first threat detection and response capabilities now enable Sophos to meet customers where they are and with exactly what they need to ensure superior security outcomes.”

Data from the report comes from an independent global study of 3000 cybersecurity/IT professionals across 14 countries conducted in January and February 2023.

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