Businesses are stepping up their cybersecurity efforts, but not necessarily for the reasons you might think, according to new research from Sophos.
Amidst growing cyber threats and global tensions, many companies are ramping up their protection in order to secure better insurance premiums, showing a present-focused concern rather than a future-oriented one.
However, this isn’t necessarily a negative development. Sophos’ ‘Cyber Insurance and Cyber Defenses 2024: Lessons from IT and Cybersecurity Leaders’ report reveals that 97% of organizations with cyber insurance have made investments to enhance their defenses.
Among those who increased their investment, 76% did so to qualify for coverage, while 67% aimed for better insurance pricing and 30% sought improved policy terms.
Despite these efforts, the costs of recovering from cyberattacks often exceed insurance coverage. Only 1% of claimants reported that their insurer covered all remediation costs, mainly due to expenses surpassing policy limits.
A separate report from Sophos indicates that recovery costs related to ransomware attacks have risen by 50% in the past year, now averaging $2.73 million.
Chester Wisniewski, director of global Field CTO at Sophos, noted that while cyber insurance can benefit companies, it should be just one component of a comprehensive risk mitigation strategy. He emphasized the importance of strengthening defenses to prevent attacks.
While businesses’ focus on insurance policies may be driving some improvements in cybersecurity, the overall landscape still has room for growth. Only 54% of UK organizations currently have standalone cyber insurance policies.
In addition to the advantages of enhanced cybersecurity, Sophos’ study also highlights the perks of cyber insurance, such as heightened protection, reduced strain on IT resources, and fewer alerts.
Wisniewski concluded by stressing the ongoing need for companies to fortify their defenses against cyber threats.