After hackers managed to steal data from an Israeli insurance company, there are fears that insurance costs will rise. Consumers worry that the hacking incident may have consequences similar to what happened in the United States a few years ago after a spate of hacking attacks prompted insurers to raise their premiums considerably.
Insurers have become hesitant to provide coverage to many businesses and organizations, especially those that have weak cybersecurity systems in place. Additionally, there are concerns that insurers may raise deductibles and put a cap on the amounts they can cover.
The good news, however, is that it is unlikely that all insurance plans will be affected by the possible increases in premiums. In the said US incident, for instance, the type of coverage foremostly affected was cyber insurance. This includes policies designed to cover the costs of forensic investigations, legal fees, credit monitoring, ad settlements.
For most other insurance plans, the costs will likely be in the usual range. If there are increases, the reasons are improbably attributable to the recent hacking incident. Insurers may raise premiums, however, based on their specific assessments.
For instance, when it comes to home renters insurance, companies will have to find compelling reasons to justify raising their premiums. Renters insurance costs much less than you think, but if you are renting an apartment or condo unit in a building where cyber attacks have been rampant, insurers may decide to raise premiums.
Cases of remotely disabled CCTV systems, for example, can reflect poorly on the ability of a landlord to secure its tenants. The problem gets worse for businesses that rent office spaces in buildings with poor security systems.
A building that has a history of fires, leaks, electrical problems, and frequently compromised free Wi-Fi services is considered a big risk factor. This is particularly true for businesses that maintain various equipment within the building. Local servers and computers getting exposed to possible physical damage and hacking attacks is bad news for insurance costs. Businesses would have to shell out more not only for their cyber protection but also for other business insurance policies.
Moreover, there are indirect increases in operating costs that may impact the premiums charged by insurers in Israel. After the high-profile security incident, other insurance companies may increase their spending on cybersecurity and other IT-related concerns. The increased costs are bound to reflect on the amounts they charge their customers.
As of yesterday, the hackers responsible for the infamous recent data breach said that they already sold a batch of information they stole in the black market. As reported by various media outfits, the hacking group that identifies as the Black Shadow is readying the sale of the second batch of data.
The longer the insurance hacking incident issue drags on, the more likely it is for it to have palpable effects on the services of insurance companies. Consumers are calling out insurance companies as well as the relevant government agencies to take action.