The digital age has brought incredible conveniences to our lives, but it has also opened up new risks – especially when it comes to cyber security and cyber insurance. As more of our personal and financial information gets stored online, the threat of cyber criminals hacking into databases and stealing sensitive data grows exponentially.
This could potentially be the biggest upcoming threat in the world of insurance.
The numbers around cyber attacks are staggering. According to a report by Cybersecurity Ventures, global cybercrime costs are predicted to grow by 15% per year over the next five years, reaching $10.5 trillion annually by 2029. That’s trillion with a ‘T’!
Closer to home, the Identity Theft Resource Center reported that the number of data breaches in 2023 hit a new high of 2,901 incidents – a 30.5% increase over 2022. With more data being exposed, the chances of having your personal information compromised rises dramatically.
ALSO READ: Top 5 Cyber Insurance Providers for Small Businesses in Texas
What’s at Risk?
So what does this all mean? Quite simply, if cyber criminals are able to access your private data like name, address, date of birth, social security number, etc., they could potentially file fraudulent claims on your homeowners, auto, life or health insurance accounts. They may even attempt to take out new policies in your name.
Insurance fraud costs billions annually and gets passed along to customers in the form of higher premiums. According to the FBI, non-health insurance fraud is estimated at more than $40 billion per year, which directly impacts your rates.
Cyber Insurance?
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The Rise of Cyber Insurance
Because of the growing threat, cyber insurance (policies that help cover costs related to data breaches and cyber attacks) is becoming a must-have coverage. Cyber insurance can help pay for:
- Notifying affected parties about a data breach
- Recovering and restoring lost data
- Covering legal fees and settlements related to the breach
- Business interruption costs and lost revenue
- And more
Industry experts recommend adding cyber insurance as an endorsement or rider to your existing homeowners or renters policy.
Forward-Thinking Protection
Simply having cyber insurance may not be enough in the long run. As cyber threats continue to evolve, new innovative protection methods will be needed such as:
Blockchain Technology
Storing data on an encrypted, decentralized blockchain makes it extremely difficult for hackers to access.
Artificial Intelligence
AI can be used to detect and respond to cyber threats in real-time by learning patterns and behaviors.
Biometrics
Using fingerprints, facial recognition or other biological traits as a security credential is far more secure than passwords.
The cyber security landscape is constantly shifting. Staying ahead of emerging risks with comprehensive cyber insurance coverage and cutting-edge protection methods could help safeguard your personal and financial information from devastating attacks.
