There are approximately 133 mn healthcare data breaches each year. Healthcare systems remain complex to secure, and cybercriminals take full advantage of this. As a result, both healthcare organisations and cyber insurers constantly adapt to the evolving threat landscape.
Chris Henderson, who leads threat operations at Huntress, works to ensure that their clients are protected against modern cyber threats. Huntress supports internal and external IT teams with robust security programmes.
Cyber Insurance’s Unique Role in Healthcare
Chris points out that cyber insurance is unlike other types of insurance. Fires aren’t constantly looking for new ways to burn your house down. Cyber insurance market, on the other hand, deals with adversaries who adapt and evolve faster than a policy might expire.
As a result, cyber insurers must continuously enhance how they assess risk during underwriting.
Insurers use threat intelligence from previous breaches, incident response firms, and intelligence sources to refine their risk models and identify the best security controls. This shift is forcing healthcare organisations to adjust in order to maintain coverage.
Key Focus on IT Help Desks and Authentication
Cyber insurers now focus on procedures for help desk verification and strong authentication methods, such as multi-factor authentication (MFA). This ensures that when someone calls to reset a password or set up MFA, they are properly verified, according to Cyber Risk Survey.
Munich Re estimates global cyber premiums at approximately $14 bn (2023) and expects the cyber insurance market to reach a size of around $29 bn by 2027. Given the continuing trend of more frequent and severe cyber-attacks, the survey indicates that the protection gap is still disproportionately huge.
Munich Re’s survey aim to better understand the challenges the global economy faces when it comes to cyber preparedness and the requirements for appropriate cyber insurance solutions. Global Cyber Risk Insurance report included over 7,500 participants from 15 countries, covering all industries and company sizes.
87% of all C-Level respondents report that their company is not adequately protected against cyber-attacks
Key topics covered included risk awareness, the role of cyber insurance with its cover elements and services as well as threat exposure for both companies and private individuals.
This focus on help desks responds to the rise in breaches that begin with social engineering attacks aimed at IT teams to gain administrative access. As this trend grows, stricter insurance requirements and possibly new coverage options for emerging threats may appear.
Evolving Insurance Requirements
Chris foresees more stringent insurance demands, including the possibility of insurers requiring vulnerability scans or third-party audits during underwriting. He also speculates that cyber insurance policies might shorten to 6-month or even quarterly terms to match the rapid evolution of cyber threats.
Regulatory Pressure and Healthcare Challenges
As healthcare consolidates, risk consolidates. Regulatory scrutiny is likely to increase, especially regarding acquisition speed and post-acquisition security governance. He acknowledges that doctors and nurses are focused on saving lives and often don’t have time to prioritise cybersecurity.
Thus, healthcare organisations must invest more in secure platforms and personnel to bolster defences. Cyber insurance premiums are expected to rise, as threat actors outpace risk models. The average cost of a healthcare breach was around $10.9 mn.
Phishing attacks and misuse of legitimate tools like remote monitoring systems have contributed to this financial toll. As premiums continue to climb, cyber insurance may cover services like incident response, legal counsel, and ransomware negotiations, but it won’t prevent the damage caused by an attack.
Cyber Insurance: A Necessary Component
For healthcare organisations, cyber insurance is essential. However, it’s important to proactively assess the costs of implementing security controls, consider compliance factors, and address how consolidation impacts security measures.
As cyber threats continue to evolve, particularly within the healthcare sector, cyber insurance provides essential coverage that helps mitigate the financial and operational impacts of a data breach or cyberattack.
However, it’s important to understand that while cyber insurance can offer support during a crisis—such as providing access to incident response teams, legal counsel, or even negotiating with ransomware attackers—it cannot prevent the damage that an attack causes.
For healthcare organisations, the value of cyber insurance lies not only in covering potential financial losses but also in the risk assessment process that insurers require.
When seeking coverage, insurers evaluate the organisation’s current cybersecurity posture, which forces healthcare providers to critically assess their security controls, compliance with regulations, and overall risk exposure.
This scrutiny encourages organisations to take proactive steps to strengthen their defences before they even qualify for coverage.
Furthermore, as healthcare systems consolidate through mergers and acquisitions, cyber insurance becomes even more crucial. The consolidation process brings about greater complexity, which can lead to new vulnerabilities. With the regulatory landscape also tightening, healthcare organisations must ensure that they have robust governance and security practices in place.
Cyber insurance offers an added layer of protection, but healthcare providers must view it as part of a broader, more comprehensive approach to cybersecurity.
The rising costs of data breaches—such as the average $10.9 mn price tag for healthcare breaches in 2023—are driving up insurance premiums. This increase reflects the growing complexity of threats, where adversaries use sophisticated methods like phishing or remote access tools to penetrate systems.
While cyber insurance premiums may continue to rise, the protection it provides remains indispensable for healthcare organisations. By embracing both proactive security measures and appropriate insurance coverage, healthcare organisations can better manage the risks posed by today’s digital landscape.
FAQ
There were about 133 mn healthcare data breaches. The healthcare system is complex and difficult to secure, making it an attractive target for cybercriminals. Both healthcare organisations and insurers must constantly adapt to stay ahead of threats.
Cyber insurance stands out because it deals with adversaries who adapt rapidly. Unlike natural events like fires, cybercriminals continuously find new ways to exploit weaknesses, pushing insurers to update risk models faster than policies expire.
Insurers rely on intelligence from past breaches, incident response firms, and other sources to refine their risk models. This allows them to better identify the most effective security controls and update their underwriting processes.
Cyber insurers now emphasise strong help desk verification and multi-factor authentication (MFA). They want healthcare IT teams to have clear policies to ensure that the person requesting password resets or MFA setup is properly verified, reducing the risk of social engineering attacks.
Insurers may start requiring vulnerability scans or third-party audits before issuing policies. The duration of policies could shorten to 6-month or quarterly terms to keep up with the fast pace of threat evolution.
As healthcare consolidates, so does risk. Regulatory pressure will likely increase, particularly around the speed of acquisitions and the security governance that follows. Healthcare providers must balance cybersecurity with the primary responsibility of saving lives.
Premiums are rising because threat actors outpace risk models. With the average cost of a healthcare data breach around $10.9 mn, insurers need to adjust their premiums to reflect the growing complexity and frequency of attacks.
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AUTHOR: Christopher Henderson – Senior Director of Threat Ops at Huntress / InsurTech Digital
