Insurers must brace for catastrophic cyber risk

In the past year, insurers have doubled the cost of annual premiums being charged to corporate clients, according to three cyber insurance providers interviewed by Bloomberg Opinion. A typical small business that previously paid $10,000 annually for $5 million worth of cover in the event of an attack is now likely paying closer to $20,000, with just $1 million worth of protection. (Credit: the_lightwriter/Adobe Stock)

(Bloomberg Opinion) — Charles Darwin said that a species best survives hardship when it is adaptable to change. That’s a mantra the insurance market will need to embrace if it wants to stem millions of dollars in payouts for cyberattacks amid high demand for protection.

In the past year, insurers have doubled the cost of annual premiums being charged to corporate clients, according to three cyber insurance providers interviewed by Bloomberg Opinion. A typical small business that previously paid $10,000 annually for $5 million worth of cover in the event of an attack is now likely paying closer to $20,000, with just $1 million worth of protection. Regardless of making a claim, premiums are shooting up while companies are getting less bang for their buck. Some are being priced out altogether.