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How Concentric AI Can Lower Your Cyber Insurance Costs

February 12, 2024
Cyrus Tehrani
4 min read

Not long ago, only a small number of businesses and industries were concerned about cyber threats and data breaches. But today, the threat landscape is so complex and data breaches so frequent that cyber insurance has quickly found itself on the list of legitimate organizational risk management strategies.

However, as cyber incidents show no sign of slowing down, insurance premiums have surged, making cost-effective cyber insurance coverage more challenging to secure. One of the keys to mitigating these costs is to understand the factors that dictate cyber insurance premiums and how to implement robust security measures to address them.

Let’s discuss what goes into determining cyber insurance premiums and how Concentric AI can help lower those costs.

Understanding how the cost of cyber insurance is calculated

The cost of cyber insurance is influenced by a myriad of factors, including company revenue, industry, the volume of sensitive data stored, and the organization’s history of cyber events and claims. More importantly, the adequacy of an organization’s security-related technical controls and the evolving threat landscape play significant roles in determining premiums.

Insurers are focusing more and more on the insured’s cybersecurity posture, with particular emphasis on their proactive measures to protect against cyberattacks.

Understanding these risk factors can help organizations manage their cyber insurance costs more effectively and guide them in strengthening their cybersecurity posture.

Here are ten key factors to look out for:

Company revenue, industry

Higher revenue often means larger insurance premiums because the potential impact of a cyber incident is typically greater for larger organizations. Companies in specific industries, such as healthcare, finance, and retail, face higher risks of cyberattacks (and potentially higher premiums) due to the sensitive nature of the data they handle, leading to higher premiums.

Customer base

Organizations with a large number of customers typically manage more personal data, increasing the risk of data breaches. Insurers consider the volume of customer data stored and processed when determining premiums, as the impact of a breach can be extensive and costly.

Sensitive data

The types of data an organization stores plays a significant role in insurance costs. Companies holding large amounts of personally identifiable information (PII), protected health information (PHI), or payment card information (PCI) are at a higher risk for costly breaches and (likely) higher insurance premiums.

Cyber incident and insurance history

A history of frequent cyber incidents or claims can indicate a higher risk to insurers, resulting in increased premiums. Organizations with significant breach experience are scrutinized more closely for their security measures and risk management controls.

Adequacy of security-related technical controls

Insurers evaluate the strength and effectiveness of an organization’s cybersecurity controls, which include assessing firewall implementation, encryption, intrusion detection systems, and other security measures. Robust security controls often mitigate risks and lower insurance costs.

Cybersecurity practices, protocols

Beyond technical controls, insurers look at the organization’s cybersecurity policies and procedures — including employee training, incident response plans, and regular security audits. Companies with comprehensive cybersecurity practices are deemed lower risk.

Regulatory Compliance

Compliance with industry regulations and standards, such as GDPR, HIPAA, or PCI-DSS, is a critical factor. Non-compliance can lead to significant fines and penalties in the event of a data breach and can greatly affect the cost of cyber insurance.

Current threat landscape

The evolving nature of cyber threats — especially as bad actors constantly evolve their tactics, techniques, and procedures (TTPs) — impacts insurance costs. Organizations must continuously adapt security measures to defend against these skyrocketing threats.

Macroeconomic factors

External factors such as inflation, economic downturns, or regulatory changes can also impact cyber insurance premiums and affect the overall risk environment and insurers’ willingness to underwrite certain risks.

Ransomware and high-impact threats

The rise in ransomware and other high-impact cyber threats will always influence insurance premiums. The severity and sophistication of these attacks can lead to substantial losses, prompting insurers to adjust premiums accordingly.

How Concentric AI can help lower cyber insurance premiums

Concentric AI’s Semantic Intelligence solution offers a powerful set of tools that can help mitigate the factors contributing to higher insurance costs. The TL;DR is this: Concentric AI delivers enhanced data visibility, automated risk identification and remediation, and a streamlined data security management platform.

Here’s more detail on how we do it.

Enhanced visibility and control over sensitive data

Concentric AI provides unparalleled visibility into where sensitive data resides, who has access to it, and how it is being used. This level of insight is critical for demonstrating to insurers that your organization has a firm grasp on its data security posture, which can be the key to lower premiums.

Autonomous, semantic-based data discovery

With Concentric AI, organizations can autonomously discover and correctly classify sensitive data across their environment without the need for complex rules or policies. Our solution simplifies the process of identifying and protecting critical information. This proactive approach to data security can tip the scales when determining insurance premiums, as it reduces the risk of data breaches and loss.

Automated risk identification and remediation

Concentric AI’s Risk Distance™ analysis leverages deep learning to identify and remediate access risks in real-time. By ensuring that sensitive data is not shared inappropriately and addressing security issues as they arise, organizations can demonstrate a proactive stance on cybersecurity, which is a key consideration for underwriters.

Simplified and effective data security management

Our agentless, API-based solution offers effortless implementation and connects to a wide variety of data repositories, ensuring comprehensive data security across both structured and unstructured data. Best of all, it’s easy to deploy and use, and can significantly enhance an organization’s security posture with minimal resource investment.

Ultimately, Concentric AI strengthens your security posture and positions your organization more favorably in the cyber insurance market.

Want to see for yourself, with your own data, how Concentric AI can boost your organization’s security posture and in turn lower your insurance costs? Contact us to a demo today.


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