‘Sharp’ cyber market hardening as European firms report rise in malicious attacks

Malicious cyberattacks accounted for 80% of cyber claims from Marsh’s continental European clients last year, up from 70% in 2019, with ransomware attacks standing at 32% of all losses, more than double the average during the previous five years. In a new report – produced in collaboration with Microsoft, law firm CMS and cybersecurity firm Kivu – Marsh reveals that total cyber insurance claims in Europe rose by 8% last year. Marsh’s claims data shows that cyber claim notifications spiked 200% for professional services firms in Europe, with a 153% increase in media and technology, and 104% in manufacturing. Financial institutions remain the most affected industry, followed by manufacturing, communication, media and technology, and then professional services. This is unchanged from 2019. When focusing solely on malicious cyber events, however, European manufacturers suffered the highest frequency of attacks in 2020. Marsh says one possible reason for this could be the high costs linked to business interruption, which makes the manufacturing industry very sensitive to ransomware attacks and therefore an attractive target. Marsh adds that while the vast majority of its cyber clients are small and medium-sized companies (74%), very large firms more frequently make claims. “This could be interpreted as larger companies being targeted through malicious cyber events to a higher degree; it could also be due to them notifying at a higher frequency and greater consistency due to stronger internal risk management processes or IT capabilities,” says the broker. COVID-19 Marsh’s report also notes that cybercriminals reacted quickly to the pandemic in Europe and generated a “wave” of Covid-19-themed attacks built into malware. Jean Bayon de La Tour, head of cyber for continental Europe at Marsh, says: “Malicious attacks and ransomware events are becoming increasingly pernicious, as cybercriminals seek to exploit weak organisational defences and human frailties. It is now not a question of ‘if’ an organisation is likely to be involved in a cyber incident, but ‘when’.” “We are in the middle of a significant ransomware wave, which is making companies even more aware of how dependent they are on technology,” Marsh states in its report. “This dependency will only increase as technology continues to advance our society, especially in terms of efficiency and quality of life. Indeed, better risk management is essential,” adds the broker. “But there is good news to share in this dark environment. We see the effectiveness of some cybersecurity controls, in the reduction of both the frequency and severity of attacks,” it continues. RISING RATES The report reveals that European cyber insurance rates increased 39% across continental Europe in Q1 2021, after the spike in malicious cyberattacks last year. This follows an increase of 37% among Marsh’s European buyers in Q4 2020. Marsh says the European cyber market is experiencing a “sharp” rise in premiums. “Since the pricing in Europe is historically low, insurers are pushing to align them more with global pricing,” it explains. Buyers in the European cyber market are also facing capacity reduction, tighter underwriting and insurers limiting exposure to ransomware-related claims. “As a result, cyber insurance is being granted to companies with a high cybersecurity maturity. With these trends in mind, both the market and its clients will need to work together to temper the surge in ransomware claims,” adds the broker.

‘Sharp’ cyber market hardening as European firms report rise in malicious attacks

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