Premiums for cyber insurance soon unaffordable for SMEs? Can ACD be an alternative?


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How do SMEs respond to rising cyber insurance premiums?

Cybercrime: Virtually all industries are under attack

Whether it's AGCS, Hiscox or Chubb, nearly all insurance companies active in the cyber business are reporting a dramatic increase in claims resulting from criminal cyberattacks in their published statistics. In recent years, claims reports increased dramatically in manufacturing (+104%), media and technology companies (+153%), and service companies (+200%). The increase in losses can be attributed on the one hand to the start of the pandemic, and on the other hand to the increased activity of people on the network as a whole. The hackers' main target was small and medium-sized businesses, which had not prepared themselves sufficiently for cyberattacks. The unfortunately expected consequence: insurance companies are raising their premiums. And not by a small margin - premium increases in the range of 50 to 100% are the rule rather than the exception. For small and medium-sized companies in particular, this is a financial challenge that will become even greater in the future. Because it cannot be assumed that their activities will be scaled back or even discontinued.   

The SME dilemma: No coverage is no solution either

The price rally in cyber insurance has not yet reached its end. Policies are already expensive and will become even more expensive in the future. There are many reasons for this:

  • Digitization: The ongoing digitization in the context of Industry 4.0 can no longer be stopped - and for many companies, it is the only way to remain fit for the future and to keep up in the market. However, more digitized business areas also make companies significantly more vulnerable to cyberattacks of all kinds.
  • Mass and class: the number of cyberattacks is rising continuously. Hackers who "only" target ransomware and the like are being joined by more and more professionally equipped and expertly trained cyber attackers who specialize in industrial espionage using advanced persistent threats.
  • Scope of policy benefits: Insurers are already limiting their benefits. In particular, ransom payments are already partially uninsurable. Companies that want to fully protect themselves against the current threat situation are being forced into extremely expensive additional contracts.

For SMEs, the big question is: Can the company still be economically protected against cyber attacks - or isn't it more economical to dispense with the expensive policies altogether and face up to the potential risk and accept possible damage? We can answer this legitimate question quite clearly at this point: Any activity by a company on the Net without coverage up its sleeve is madness - and in the worst case threatens the existence of the entire business. Ransom demands in the millions, access blocked by hackers or data leaks containing company secrets are just the tip of the iceberg of possible risks in the age of digitalization.

Is there no alternative to unaffordable premiums?

Every physician knows that "prevention is better than cure. The old adage has not lost any of its relevance in a digitized corporate world - and can be put forward as an alternative to the rising premiums charged by cyber insurers. The best protection against criminal attacks on a company's networks is the attack that doesn't happen in the first place. Or one that is detected early enough to minimize the impact and damage. Going from hunted to hunter is the motto here when it comes to alternatives to cyber insurance. With the Active Cyber Defense (ACD) service, early attack detection is available that can prevent successful cyber attacks and optimally protect companies against possible attacks even without existing insurance coverage. Hacker defense around the clock for the price of an iPhone, without the need for your own SOC or SIEM and without expensive forensics experts: ACD makes it possible.

What is ACD and how exactly does the managed service for early attack detection work?

Active Cyber Defense is a service in which a company's IT infrastructure is monitored around the clock, 365 days a year, by Allgeier secion's cyber security experts. ACD does not tie up any personnel resources: the implementation of the solution, the maintenance and also the alerting in case of attack activities are carried out as a fully managed service by an experienced Security Operations Center. In just three to seven days, ACD is fully integrated into the IT infrastructure and immediately detects unwanted activities in the networks or prohibited telemetry data transmissions from software or apps. Monitoring of the IT infrastructure and identification of attack activity is completely agentless. No local software agents or the like need to be installed. The great advantage of ACD: anomalies in the networks are immediately detected and clearly identified. Even before the cybercriminals are able to embed themselves in the depths of the systems and cause damage, they are detected - and can be combated immediately.

The benefits of ACD:

  • Proactive hacker defense without SIEM and SOC.
  • ACD immediately notifies when attack activity occurs on the network
  • Maximum network security in a short time
  • Financial planning security without hidden follow-up costs
  • Relief of internal IT security teams
  • EU-DSGVO compliant managed service without data storage in the cloud
  • Protection of worldwide company locations possible

Conclusion on the rising premiums for cyber insurances

Unfortunately, protection against criminal activities in digitalized companies is indispensable. In recent years, cyber attacks have once again significantly increased in frequency and professionalism. Cyber insurers can hardly cover the resulting damage - and pass on the damage expenses to their insurers in the form of extremely sharply rising premiums. Small and medium-sized companies can hardly afford the current premiums - and it is foreseeable that premiums will rise again significantly in the near future. But no protection is no solution either - because in the event of a claim, sums in the millions can quickly become due. Sums that can put a company in dire straits. ACD, Active Cyber Defense, is a lean, powerful and, above all, affordable managed service that turns companies from the hunted into the hunters. ACD enables round-the-clock monitoring of networks without the need to beef up in-house IT security or implement a dedicated SIEM.

Need help upgrading your IT security for 2022? Contact us!

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