Since the start of the COVID-19 pandemic in March 2020, reported cybercrime incidents have increased by nearly 70% (according to the FBI), driven by the shift to work and life online.
From a consistent rise in identity theft aimed at individuals and social engineering targeting small businesses, to hackers shutting down a Colonial pipeline critical for the entire East Coast’s fuel supply, cyber criminals have seized a multitude of opportunities.
In response, the global cybersecurity market has seen an accelerated expansion over the past 12 months. For 2020, its size was estimated at $162.5 billion. In early 2021, its CAGR is projected at 12.5%, and the market as a whole is set to reach $418.3 billion by 2028.
As a result, Wall Street estimates see some cybersecurity stocks rising by up to 79% over the coming year.
However, despite the growth of the cybersecurity market as a whole, it remains divided into distinct products, platforms, and services that each form a vital component of digital security.
Platforms that offer technical elements like antivirus, virtual private networks (VPN), and WiFi security applications proliferate, as do providers of services such as cybersecurity insurance, credit and breach monitoring, and identity theft protection.
Consequently, consumers and businesses alike are navigating a jungle of partially overlapping digital security options at their disposal.
Going forward, the future of digital safety lies in comprehensive solutions that harness the synergy effects of combining technical elements with services like monitoring and insurance.
Cybersecurity Challenges for Business to Overcome
The ever-advancing evolution of – and business’ dependence on – technology such as the Internet of Things (IoT) results in unprecedented levels of interconnectivity in the virtual sphere. Consequently, the exposed attack surface for cyber criminals is continually expanding.
As a Forbes article recently outlined, these developments – coupled with intensive media coverage of high-profile hacks – is driving up businesses’ risk awareness, and their interest in cybersecurity measures and insurance.
In addition, the all-encompassing shift to remote work during the pandemic highlighted the vulnerabilities presented by a lack of endpoint security and missing cyber risk awareness training among team members.
Finally, cyber threats themselves are constantly evolving. Ransomware in particular is becoming a prevalent problem. Not only are these types of attacks becoming more frequent, they are also becoming more severe. Hackers have been targeting entire company networks at once – backups included – to maximize damage and their leverage for extortion.
Paradoxically, the fact that cyber extortion is increasingly covered by insurance policies adds to the threat. Because of this insurance component, attackers have a higher certainty that they will get paid, and paid faster.
A Maturing Cyber Insurance Market Responding to Increasing Claims
In an industry report published earlier this year, data revealed that cyber insurance premiums, currently totaling about $5 billion per year globally, are set to increase by 20% to 30% annually in the future.
The reason for this rise in premiums is the higher frequency of successful cyberattacks, and the resulting increase in claims being made. Consequently, insurances now have to pay out more than they originally calculated a few years ago when first drafting their policies.
This development highlights the possible synergy of bundling technical defenses with insurance of various types and monitoring services.
By providing customers with a comprehensive set of digital security solutions, insurers can minimize the likelihood of a successful breach. Simultaneously, consumers can eliminate redundancies between various cybersecurity platforms and subscriptions that they might currently have.
Comprehensive Solutions Address Complex Cybersecurity Challenges
Setting up a comprehensive digital security system is complex, especially for large and distributed teams. Often, it presents a challenge even for businesses with a competent IT team and well-founded cybersecurity knowledge.
This complexity underscores the necessity of convergent approaches by insurers and cybersecurity vendors.
Increasingly, insurances mandate strong cybersecurity measures on the part of the insured. For example, many are making payouts conditional on having installed good antivirus, as well as formulating backup regimes, recovery plans, and breach response plans.
Conversely, prominent established cybersecurity vendors like Kaspersky, Avira, Avast and Bitdefender have long been expanding from simple antivirus products to more extensive solutions. These include elements such as behavioral AI-based detection of suspicious (user) behavior and penetration testing, in which a cybersecurity expert actually attacks a network in order to assess how secure it is.
All-encompassing solutions combining these elements, such as Aura, are increasingly gaining in prominence in the cybersecurity market.
Their main advantage lies not just in harnessing synergies, which often allow for lower premiums and more straightforward system setup, but also in offering additional services.
These services range from breach and credit monitoring to access to specialists who guide customers through the turmoil of a successful breach, and the ensuing recovery process. Notably, this includes experts like accountants and fraud specialists to take care of financial and legal challenges, rather than the IT issues traditional cybersecurity experts usually tackle first.