Cyber insurance market softens despite rising AI threats
Cyber insurance premiums declined as carriers added capacity, but artificial intelligence threats advanced faster than security defenses. Maria Long, chief underwriting officer at Resilience, said the controls implemented 18 months ago no longer protect against AI-driven attacks. Social engineering accounted for 57 percent of claims and 60 percent of losses in the first half of this year, as criminals used deepfake technology to bypass email filters and employee training programs.
Manufacturing companies operate legacy systems that cannot be replaced without production shutdowns. Long warned insurers against reducing underwriting standards to gain market share amid intensifying competition. Brokers must advise clients to improve cyber maturity rather than pursue the lowest premiums available in the marketplace.
The industry faced strict underwriting requirements from 2020 to 2022 following ransomware attacks that increased claim costs. Carriers required multi-factor authentication, endpoint protection, and incident response plans as minimum coverage conditions. Long said quality market share matters more than volume growth as the sector balances profitability against premium expansion goals.
