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AIG is one of the top cyber insurance companies in the U.S. Todayâs columnist, Erin Kennealy of Guidewire Software, offers ways for security pros, the insurance industry and government regulators to come together so insurance companies can continue to offer insurance for ransomware. eflonCreativeCommonsCC BY 2.0
We are all well aware that ransomware exposures and impacts have grown rapidly as professionals have shifted to working from home because of the pandemic, resulting in expanded threat and attack surfaces. By some accounts, ransomware attacks increased nearly 150% in the past year, and insurance claims and costs of payments skyrocketed after having already jumped approximately 230% between 2018-19. Insurance claims from cyber/ransomware events have consumed up to 40% of the claims of some insurersâ cyber books.
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In a recent letter to insurers, the New York State Department of Financial Services (“NYDFS”) acknowledged the key role cyber insurance plays in managing and reducing cyber risk – while also warning insurers that they could be writing policies that have the “perverse effect of increasing cyber risk.” If a cyber insurance policy does not incentivize the insured to maintain a robust cyber security program, the insurer can end up bearing excessive risk when the customer leans on the policy as their business continuity plan.
You may be wondering “What does this have to do with my business? I don’t do any business in NY state.” However, your insurer might be subject to the NYDFS cybersecurity regulation (23 NYCRR 500) and, if so, likely received this letter.
On February 4, the New York Department of Financial Services (DFS) released the Cyber Insurance Risk Framework (Framework), which is considered the first guidance by a U.S. regulator on.