To close the growing cybersecurity insurance gap, businesses need to rely on AI-driven real-time insights for their risk assessments. Cyber insurers aim to help clients minimize the risk of breaches by continuously enhancing cybersecurity strategies. These improvements should target real-time risk assessments, underwriting, claims processing, and resilience planning, with AI providing significant benefits in each area.
Insurance premiums are rising due to the increase in ransomware, social engineering, phishing, and privileged access credential attacks. Ransomware was the main cause of cyber insurance claims in early 2024, followed by supply chain and business email compromise (BEC) attacks. BEC attacks doubled in 2023, and supply chain attacks have continued to grow, costing businesses $46 billion in that year alone.
Many businesses struggle to afford cyber insurance, particularly small- and medium-sized businesses (SMBs). More than a quarter of SMBs surveyed were denied coverage. If granted a policy, SMBs often face significant coverage exclusions. Last year, 67% of organizations experienced premium increases of 50-100% when renewing or applying for policies, with new exclusions being a common trend. Businesses often need to choose between purchasing cyber insurance and investing in additional cybersecurity measures.
AI is reducing the costs and time of risk assessments, which can traditionally cost between $10,000 and $50,000 and take four to six weeks. AI is also improving the underwriting process, cutting it from weeks to days and increasing efficiency by up to 70%. Traditional claims processing, which averages $15,000 per claim and can take up to six months, is being expedited by AI-based systems that cut processing times by over 80%.
Several companies, including At-Bay, Corvus Insurance, Cowbell Cyber, Upfort, and Resilience Insurance, are using AI-based solutions to streamline cyber insurance. CrowdStrike’s Falcon for Insurability program is another significant development, offering AI-native cyber protection at preferred rates. This initiative is expected to lower premiums by 10-30% and make it easier for previously ineligible companies to obtain cyber insurance. The program leverages the capabilities of the CrowdStrike Falcon platform to help insurers reduce underwriting risk and make smarter decisions.
To improve cyber insurance, it’s essential to incorporate human expertise into AI-driven workflows. CrowdStrike’s Managed Detection and Response (MDR) service combines AI-powered defenses with human insights to continuously enhance protection. This hybrid approach is crucial for the evolving insurance landscape.
Traditional insurance models that diffuse risk don’t work for cyber insurance due to the potential for widespread, simultaneous attacks. Advanced AI and predictive technologies are needed to identify and anticipate attack paths, providing real-time insights to minimize risk. This proactive approach helps keep premiums affordable and reduces the likelihood of widespread cyber events.
Overall, AI-driven improvements in cyber insurance aim to make the process more accessible and efficient. Companies often face lengthy application processes only to be rejected without explanation. By identifying and addressing specific vulnerabilities, AI can help insurers offer better coverage and lower premiums, benefiting both insurers and insured companies.
The trend of using AI to enhance cyber insurance is expected to continue, with more vendors adopting similar strategies. The goal is to reduce breach risks while driving down premium costs, ultimately benefiting a wider range of businesses.