Insurance and reinsurance market must prepare for technology disruptions and cyberattacks
Insurance companies and reinsurers must prepare for the increasing risk of unplanned technology disruptions, largely driven by cloud service provider issues and the frequency of Single Point of Failure (SPoF) events across the industry, according to a Global Threat Briefing report from cyber risk analytics provider CyberCube.
Cloud service disruptions are occurring at an alarming rate, impacting critical services across sectors.
The insurance and reinsurance market must be prepared for technology disruptions due to SPoF, as demonstrated by events in 2024, including the Change Healthcare attack, the CDK Global ransomware incident, and the global CrowdStrike IT outage.
The CrowdStrike outage could lead to a surge in demand for cyber insurance as the incident highlighted the risks faced by businesses and individuals.
The report also notes that cyberattacks on critical industries such as energy and utilities, transport and logistics, and the public sector are on the rise globally. State-sponsored hacking groups, including those from Russia, Iran, North Korea, and China, pose a significant threat by targeting critical infrastructure with geopolitical objectives.
According to the UK’s National Cyber Security Centre (NCSC), the number of significant incidents at the national level has increased by 50% compared to the previous year, which is a worrying sign.
Hackers working for states are increasingly using ransomware tactics to achieve geopolitical and strategic goals. This approach allows states to disguise their actions as normal criminal activity, making it difficult for targets and governments to directly attribute attacks to state entities.
In addition, ransomware is a very effective tool for disrupting critical sectors.
Both state and criminal hackers have targeted electricity providers, power grids, and utilities with ransomware and other destructive tactics.
The report explains that these incidents range from attacks affecting local and national operations, including cases in the British Virgin Islands and the United States, to data theft and extortion schemes targeting industrial software providers in France and the Netherlands.
While most of these attacks did not cause energy disruptions, CyberCube notes that they highlight the growing risks to this critical sector on a global scale.
CyberCube also highlighted the ongoing cyberattacks on the US public sector by a growing network of state and criminal hackers working together to destabilize society and undermine trust in institutions.
These attackers are attempting to exploit vulnerabilities in public sector networks, including local and state government systems, electoral systems and critical infrastructure, to disrupt key services, access sensitive data and manipulate public opinion.
The cyber threat analysis also shows that ransomware is primarily affecting the US, but there is also an increase in these threats in countries surrounding conflict zones, such as Ukraine, as well as in countries whose governments are actively investing reserves in cryptoassets.
Insurers must adapt by developing more precise policies and implementing advanced threat intelligence.
It also highlights that insurers should work closely with governments and security agencies to improve attack attribution and response mechanisms.
“As cyber threats increasingly straddle the line between criminal activity and state action, resilience depends on the ability to adapt, protect critical operations, and respond quickly and effectively to systemic risks. As we approach 2025, it is clear that a comprehensive and adaptive approach to cyber risk assessment is critical to ensuring societal stability in our increasingly interconnected digital world,” the report states.