Cyber Insurance Rates Drop as Fewer Hacks Spotted

Protecting data is vital to companies’ continued operation, particularly when it comes to payment data.

Those companies that can’t, or won’t, do the job often lose face sufficiently that customers go elsewhere, where they believe data is better protected.

A new report from Reuters suggests that cyber insurance rates—and yes, there’s such a thing as cyber insurance—are in decline because there are fewer major hacking efforts taking place.

Rates dropped for retail and healthcare companies as the number of high-profile breaches for the first quarter of 2016 fell off, which is a huge change from what many in the industry were expecting.

Especially given that recent major hacking efforts for places like Anthem and Target saw rates on the rise.

Since those recent efforts aren’t so recent any more, prices for insurance against the attacks fell and prices are now more stable.

A million dollars’ worth of insurance went from $21,642 in 2015—up 28 percent against 2014’s numbers—to just $18,756 this year, down 13 percent.

Naturally, such good news may not last, so those interested in picking up insurance may want to do so before the next high-profile hit—and there likely will be one before too much longer—strikes.

However, there’s a point to consider here: maybe security has just gotten better. We all know that the Europay, MasterCard, Visa (EMV) system is now pretty much universal for major retailers; about the only holdouts left are the smaller firms who believe that the actual costs to upgrade systems outweigh the potential costs of breaches.

We’ve seen advancements in encryption come out as well, and more systems are considering the use of perimeter defense—firewalls and the like—as well as internal defenses, making systems a little harder to breach. This may fend off all but the most dedicated hackers, which means fewer hacks overall.

Still, it’s early in 2016. We’ve got a long road ahead, and plenty of opportunity for hackers to get involved. Those companies that want to take advantage of the lower rates likely should while they’re there to enjoy, and potentially consider locking in the rates now.

Things are quiet on the hacking front for a change, though just how long that will last is anyone’s guess.