Why Cyber Insurers Should Partner in Cybersecurity Support

The history of insurance dates back as far as 2000 BCE, when merchants and traders developed basic risk-sharing agreements to protect against financial losses from unpredictable events. At its most basic, insurance as a concept was merely a financial safety net.

Fast-forward some 4,000 years and insurance providers are not only in a position to offer businesses much more than that, but “more” has become both needed and expected, forming a critical part of companies’ prevention and resilience strategies.

Proactive Security Measures
The cyber insurance industry is seeing a huge shift beyond simply covering financial losses after a range of cyber incidents.

While triggered by a range of events, the number one catalyst for this shift has been the increasing growth and sophistication of cyber threats, which has left companies vulnerable—especially those that rely on outdated reactive approaches.

In its 2024 “Cost of a Data Breach Report,” IBM said the 2024 global average cost of a data breach was $4.88 million, which was a 10% increase from the previous year and the highest ever. In addition, according to NordLayer, ransomware alone costs an average of $5.2 million, and thieves have stolen over 1 billion records.

Thanks to the exponential growth of AI, we don’t expect these figures to slow any time soon, having already seen threat actors busily advancing the development of AI-powered hacking tools—all so they can exploit systems with greater speed, precision, and complexity.

We also expect the sophistication of the technology’s use in AI-based deception to increase, too, as the quality of digitally produced visual representations constantly improves and deepfakes become harder to detect.

The response from businesses has been to recognize the importance of investing in strategies that anticipate and mitigate risks before they materialize, rather than waiting to respond to breaches and pick up the pieces.

This prevention-first mindset has been spearheaded in part by the cyber insurance field, with insurers now expanding their role to offer supplementary cybersecurity services and tools.

Examples include:

• Continuous risk assessment: of networks, endpoints, and cloud environments, ensuring real-time threat detection and AI-driven counterintelligence.
• Employee cybersecurity awareness training: tools such as smart phishing simulators and interactive games that mimic real-world attack methods to train employees to spot and avoid social engineering tactics.
• Penetration testing: comprehensive internal and external network assessments that identify and address vulnerabilities.
• MDR service: leverages continuously updated detection rules, advanced prevention technologies, and real-time response capabilities to defend against sophisticated threats like ransomware.
• Dark web monitoring: alerts businesses if compromised credentials or sensitive data appear on the dark web, allowing for swift action.
• Incident response planning: helps businesses prepare for, respond to, and recover from cyber incidents.

Three-way Win
The increased interest and uptake in the use of these tools is one that is most certainly needed, benefitting the entire ecosystem and reshaping the industry for the better.

For the broker, they can offer clients more than just policies, positioning themselves as a trusted advisor and key part of businesses’ resilience strategies.

For policyholders, insurance is a tool for resilience, not just a safety net after an incident. By adopting a proactive approach and integrating advanced security solutions—such as MDR services, penetration testing, and cybersecurity training—businesses can not only reduce their exposure to cyber risks but also strengthen their overall security posture.

There is immense value in cyber insurers being seen as partners in resilience, rather than just claims providers.

By focusing on proactive risk management, insurers can help businesses strengthen their cybersecurity posture, ultimately leading to fewer claims and a more robust underwriting model.

As policies are increasingly structured and priced based on real-time risk assessment and continuous security improvements, rather than just historical data, the shift will ultimately transform the future of underwriting and claims.

Prevention over cure has long been deemed common wisdom, and I for one am glad to be seeing more of it in the insurance field.