In the age of AI and Cybersecurity, there’s news of cyber attacks and data breaches every other day. Cyber threats are increasing with each passing day as technology transforms everyday. One of the safety nets that can save your business from such large-scale losses due to cyber criminal activity and scams is Cyber Insurance.
A cyber insurance policy helps organizations pay for any loss that occurs due to cyber attacks or data breaches. Cyber insurance is a must-have (element of cybersecurity) in case of any emergency but should be considered an integral part of the company’s digital infrastructure.
A cyber insurance policy is made to cover cybersecurity risks, privacy risks, operational risks, network interruptions, etc. Often, the coverage includes legal expenses, data restoration costs, IT forensics, public relations costs, etc. More companies are increasing their cyber insurance coverage.
The pandemic has forced us to digitize our businesses. This increased our cyber awareness but also made companies more vulnerable to cyberattacks. Government data shows that India saw 13,91,457 cybersecurity incidents in 2022. Because of this, the premium costs for cyber insurance have also increased because insurance companies have tightened their offerings and have reduced coverage availability.
As the technologies are evolving, hackers are using more sophisticated tactics to conduct malicious activities. AI is a new-age technology that is becoming increasingly popular. It automates a lot of your tasks and makes your lives easier. But is it safe from malicious activities? Not really.
How AI is Used for Malicious Activities?
As AI becomes more advanced, hackers employ the same technology and find new and creative ways to use it to their advantage. For instance, AI can help hackers generate realistic phishing emails, deploy malware, and create realistic deepfakes.
This is rather counter-intuitive but in the fight against AI, your most competent ally is surprisingly AI.
AI and machine learning can be used in cyber security to detect and respond to cyber threats. AI can also detect vulnerabilities in the network traffic. It can analyze patterns that might not be obvious to humans. With cyber-crimes increasing in prevalence and sophistication, cyber insurance agents are also turning to AI to help them better navigate the risks and help them underwrite the risks.
The other insurance arenas have a well-defined process. However, that’s not the case with cyber insurance. As technologies are ever-evolving there is no real standard process in which underwriting is done. The underwriting models of today are not equipped to adequately assess risk. The lack of underwriting models means that insurers tend to focus on how many security tools a company has to fight against an AI enabled attack and how ready they are to see through their worst days in cybersecurity.
According to Paul Bantlick, group head of cyber risks at specialist insurer Beazley, data quality will be an important factor as insurance companies use AI to drive underwriting and claims decisions. The insurers with the best data will likely win in the market competition.
Cybersecurity: How to Build Cyber Resilience
Insurance companies will use Ai to determine the cyber resilience of their customers across different factors including deployed network security, data security capabilities, policy settings and training and education, which in turn can be reflected in quoted premiums. So, depending on their cybersecurity capabilities, their premiums are decided. The better the capabilities, lower the prices of their premiums.
When it comes to claims, AI and Machine Learning algorithms can be employed to spot irregularities, examine claims data, and highlight fraudulent activities. This increases effectiveness, lowers expenses, and ensures that the policyholder’s requirements are met more quickly.
As we go further down the line to fight against evolving technologies like AI, using AI for cyber insurance could be a game changer and help companies to navigate their cyber security issues.
(Author: Karishma Chandnani is a Content Writer at TechDoQuest. She offers a refreshing & youthful perspective on the topics she writes about).