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AXA XL Reveals Insights on Cyber Claims

In a recent analysis conducted by AXA XL, it was found that a remarkable 88% of the global cyber losses over the last ten years stem from claims that exceed $1 million. This finding points to a critical trend in the cyber insurance landscape, where a small fraction of high-value claims accounts for the majority of total cyber losses.

The report, titled "Cyber Claims Unveiled: A Focused Study on Trends, Threats, and Tailored Solutions," delves into over 300 cyber claims, uncovering key patterns surrounding the types of incidents, their severity, and the industries most affected. Fran Gari, Head of Pricing, Global Cyber, who also authored the report, emphasizes that understanding these trends is crucial for enhancing cybersecurity measures and developing proactive risk management strategies.

Key Findings from the Analysis

1. Severity of Claims on the Rise: The analysis indicates an alarming increase in the severity of large claims, with ransomware incidents being a significant contributor.

2. Ransomware Dominance: Since 2018, ransomware attacks have emerged as a primary cause of severe claims, impacting 54.3% of claims in recent years. This emphasizes the critical need for specialized underwriting practices and policy designs that address this growing threat.

3. Improved Detection Times: There has been a notable shift in how data breaches are identified. The report reveals that growing numbers of companies are now detecting breaches internally rather than relying on outside parties. Prior to 2019, only 35.7% of attacks were flagged internally, but this figure has surged to 66%.

4. Industry-Specific Insights: The impact of cyber incidents varies across industries. For example, sectors like manufacturing and retail experience a higher likelihood of business interruptions due to ransomware claims than others. Additionally, larger organizations tend to report a greater frequency of substantial claims due to their extensive networks.

The Importance of Cybersecurity

Both Danielle Roth, Head of Cyber Claims for AXA XL, and Andrew Farr, Global Chief Underwriting Officer, underline the importance of resilience and proactive measures in cybersecurity. Roth notes encouraging trends, such as reduced shutdown durations and improved detection methods, indicating organizations are becoming more robust against cyber threats.

Farr further states that comprehending the narratives behind significant claims allows AXA XL to refine its underwriting practices, develop new products, and better serve clients with effective risk management strategies.

Conclusion

The full report is not only a valuable resource for understanding the evolving landscape of cyber claims but also underscores the critical nature of investing in strong cybersecurity measures. As cyber threats grow increasingly complex, companies must prioritize effective strategies for prevention and recovery to safeguard against potential disruptions.

For those interested in strengthening their cybersecurity posture, AXA XL offers a wide array of cyber insurance products and services, designed to help businesses mitigate risks associated with cyber threats. You can learn more about these services at AXA XL’s website.

This analysis is a wake-up call for businesses to invest thoughtfully in technology and practices that can prevent costly breaches and ensure quicker recovery when incidents do occur. Collaboration with insurance providers like AXA XL can enhance protection and support strategic planning in the face of rising cyber risks.