The average cost of a data breach in 2022 in the U.S. reached a new all-time high of $9.44 million, according to IBM. With this continued rise in cybersecurity incidents, financial services firms are a popular target for cyberattacks.
However, obtaining cyber insurance can help mitigate these attacks’ financial burden. Now more than ever, financial services firms are strongly encouraged to get cyber insurance due to the intensifying threat landscape and increasingly complex requirements from regulatory bodies or authorities such as the SEC and FINRA.
Because of these developments, many businesses have turned to managed service providers (MSPs) for their expertise to manage cyber insurance compliance.
What is Cyber Insurance Compliance?
Cyber insurance helps to mitigate or lessen the financial burdens from a data breach or other cybersecurity incident should your business fall victim. Still, as more and more companies file claims, the cost of cybersecurity insurance continues to rise. Premiums increased 79% in the second quarter of 2022 alone.
As the cost and frequency of cyberattacks increase, cyber insurance companies are forced to cover more payouts which causes a premium increase across the industry. Along with this premium increase, insurers also implement increasingly more stringent minimum security requirements for applicants for cyber insurance coverage.
Previously many of these requirements were simple checkbox practices you could complete once and forget; now, insurance companies are shifting to an active monitoring approach. This includes conducting periodic scans of your cybersecurity systems to ensure you maintain the required standards for coverage. If your external cyber footprint strays from secure standards, you expose yourself to a risk of adjusted premiums or a complete loss of coverage.
Benefits of Partnering with an MSP
Due to this active monitoring approach, many financial services firms are partnering with the experts at an MSP for guidance and maintenance of their internal and external cybersecurity environments that adhere to the insurance requirements.
Partnering with an MSP can provide additional benefits to firms, too.
- Access to industry expertise and knowledge
As with the financial services industry overall, there is no one-size-fits-all for insurance coverage. Internal and external security posture and cybersecurity practices play a big role in deciding required insurance minimums so working directly with an MSP can help you become a better candidate for cyber insurance coverage at a lower premium.
MSPs help ensure you have the proper cybersecurity and data protections before applying to improve your chances of approval for coverage. In fact, in many cases, an MSP has established relationships with preferred cyber insurance providers that benefit their clients.
- Compliance as a Service and Cyber Insurance
With compliance as a service (CaaS) products, a Governance, Risk, and Compliance (GRC) platform is included with your service. This platform allows organizations to track, manage, and report on compliance related to industry-specific laws and data security standards. This is integral should you experience a data breach or other cyber incident.
When filing your claim, proof of a business’s compliance is often required at the time of the incident, or you will be denied—utilizing compliance as a service product makes obtaining this proof much more straightforward. Access to a GRC and assistance filing a claim from your MSP through these services save you time when it matters most.
Streamlining the Requirements of Cyber Insurance
Gone are the days of simple checkbox requirements for obtaining cyber insurance. Companies must adhere to more stringent requirements in today’s market to obtain and maintain their policies. Working with an IT partner to gain cyber insurance coverage has many distinct advantages.
MSPs assist you during the application process and help secure lower premiums through vendor relationships. They ensure your company stays compliant with your policy and external regulations. If you face a data breach or attack, MSPs guide you in filling out claims forms. They also provide the necessary documentation to your provider when submitting your claim.
The cyber insurance market and models will continue to evolve. With compliance assurance and engineering excellence, the professionals at Coretelligent are helping financial services organizations find the path forward. A partnership with Coretelligent can help financial services firms establish themselves as insurance candidates, lower premiums, and mitigate overall risk.
Learn more about CoreComply, Coretelligent’s full compliance solution that streamlines and enables compliance, third-party risk management, DDQ, and cyber insurance audits.