Is cyber insurance the answer to increasing cyber attacks?
While much effort is expended in preventing damaging cyberattacks, the risk can never be mitigated completely.
The cyber attacker threat
Indeed, the news has recently been filled with reports of damaging cyber attacks, often state sponsored and penetrating deep into the heart of not just companies, but commonly used software that many rely on and presume is safe. Look no further than , which exploited flaws and stolen passwords to steal data from the networks of targets via Microsoft’s Exchange email software. Its impact was felt around the globe, with potentially thousands affected and the finger of blame pointed firmly at the Chinese state.
Founded in 2017, the company offers cyber insurance alongside a suite of cybersecurity tools and incident response capabilities. Attracting 42,000 customers across the US and Canada, the company provides up to $15mn of cyber insurance coverage for when the worst should happen.
The growth of cyber insurance
The company today announced a funding round worth $175mn, led by Index Ventures alongside General Atlantic and the company’s existing investors. Valuing the company at $1.75bn (firmly above the technology unicorn threshold), the round takes lifetime funding to $300mn.
"We founded Coalition four years ago with a mission to solve cyber risk, introducing a technology-led approach to risk management and insurance underwriting, pricing, and distribution," Joshua Motta, CEO and co-founder of Coalition. "Our ambitions now extend beyond cyber insurance. Nearly one in ten Fortune 500 companies is an insurance company, yet most were founded before World War II. With this funding, we plan to bring our technology-driven approach to other lines of commercial insurance as we seek to build the digital insurance company of the future."
The company said it would use the funds to expand internationally and introduce new product lines.
"The future of insurance will be defined by technology, and we will continue to invest in building a leading technology company focused on innovation across all aspects of the insurance value chain," said Motta.
IT Employees Predict 90% Increase in Cloud Security Spending
As companies get back on their feet post-pandemic, they’re going all-in on cloud applications. In a recent report by Devo Technology titled “Beyond Cloud Adoption: How to Embrace the Cloud for Security and Business Benefits”, 81% of the 500 IT and security team members surveyed said that COVID accelerated their cloud timelines. More than half of the top-performing businesses reported gains in visibility. In fact, the cloud now outnumbers on-premise solutions at a 3:1 ratio.
But the benefits are accompanied by significant cybersecurity risks, as cloud infrastructure is more complex than legacy systems. Let’s dive in.
Why Are Cloud Platforms Taking Over?
According to Forrester, the public cloud infrastructure market could grow 28% over the next year, up to US$113.1bn. Companies shifting to remote work and decentralised workplaces find it easy to store and access information, especially as networks start to share more and more supply chain and enterprise information—think risk mitigation platforms and ESG ratings.
Here’s the catch: when you shift to the cloud, you choose a more complex system, which often requires cloud-native platforms for network security. In other words, you can’t stop halfway. ‘Only cloud-native platforms can keep up with [the cloud’s] speed and complexity” and ultimately increase visibility and control’, said Douglas Murray, CEO at cloud security provider Valtix.
Here’s a quick list of the top cloud security companies, as ranked by Software Testing Help:
What are the Security Issues?
Here’s the bad news. According to Accenture, less than 40% of companies have achieved the full value they expected on their cloud investments. All-in greater complexity has forced companies to spend more to hire skilled tech workers, analyse security data, and manage new cybersecurity threats.
The two main issues are (1) a lack of familiarity with cloud systems and (2) challenges with shifting legacy security systems to new platforms. Out of the 500 IT employees from Devo Technology’s cloud report, for example, 80% said they’d sorted 40% more security data, suffered from a lack of cloud security training, and experienced a 60% increase in cybersecurity threats.
How Will Companies React?
They certainly won’t stop investing in cloud platforms. Out of the 500 enterprise-level companies that Devo Technology talked to throughout North America and Western Europe, 90% anticipated a jump in cloud security spending in 2021. They’ll throw money at automating security processes and investing in security upskilling programmes.
After all, company executives will find it incredibly difficult to stick with legacy systems when some cloud-centred companies have found success. Since moving from Security Information and Event Management (SIEM) offerings to the cloud, Accenture has saved up to 70% on its processes; recently, the company announced that it would invest US$3bn to help its clients ‘realise the cloud’s business value, speed, cost, talent, and innovation benefits’.
The company stated: ‘Security is often seen as the biggest inhibitor to a cloud-first journey—but in reality, it can be its greatest accelerator’.