Cyber remains the most volatile class of insurance in New Zealand, according to the latest Insurance Market Outlook by Crombie Lockwood.
According to the report, cyber insurance premiums for the fourth quarter of 2021 increased by 130% in the US and 92% in the UK, mostly driven by the continued increase in the frequency and severity of ransomware claims, with many insurers tightening coverage terms and conditions.
Claims in New Zealand are increasing, with CERT NZ issuing several alerts in 2021, including the Log4j vulnerability that allows attackers to illegally access systems and services, the FluBot malware infecting Android phones, and critical security issues in Adobe Acrobat, Adobe Reader and Microsoft Windows.
Due to the increasing risk and claims, the brokerage has observed many insurers increasing premiums, restricting coverage and demanding more information from customers.
“In New Zealand, premiums have been increasing anywhere from 20% upwards,” Crombie Lockwood said. “Sub limits are sometimes being applied for ransomware claims and new exclusionary language being applied to end-of-life software is becoming the norm. Nearly every insurer will require verification of at least some preventative controls, which will likely include multifactor authentication, remote desktop protocol, data backup practices, segregation of networks, encryption, patch management, privileged account management, employee training and a host of others.”
