Why Insurers Want You Secure, Not Just Insured

If you’re the Accidental CISO in your healthcare organization, cyber insurance can feel like an adversary. Another party asking for documentation, another set of requirements standing between you and a renewal. But the insurer sitting across the table from you wants the exact same outcome you do: no breach, no ransomware demand, no six-figure claim. Their business depends on it as much as yours does.

We’ve found that the organizations that get the best insurance premiums are the ones who stop treating their insurer as a checkbox exercise and start treating them as a resource. Here’s what that looks like.

The Insurer’s Business Model Depends on You Not Filing a Claim

Insurance companies make money by collecting more in premiums than they pay out. In recent years, cyber insurance loss ratios — the share of every premium dollar insurers actually pay out in claims — have stayed below 50%, meaning insurers have kept more than half of what they collected before a single claim was paid.¹

Every incident you prevent is money the insurer keeps. Every incident you don’t is a loss they have to absorb. That’s the entire business model, and it’s why insurers have gotten so much more invested in your security posture over the past few years. Stricter underwriting isn’t insurers being difficult, it’s how they protect the same outcome you’re protecting: a year that goes by without an incident.

Increasingly, Insurers Are Putting Skin in the Game

A growing number of carriers, including some of the largest names in cyber insurance, now bundle vulnerability scanning, threat intelligence, and security monitoring directly into their policies.² The logic follows that a policyholder who catches a vulnerability before it’s exploited never files a claim, and prevention is cheaper for the insurer than a payout.

If you haven’t asked your broker or carrier what’s included in your policy beyond the payout terms, that’s worth a phone call. You may be sitting on tools that would help close the exact gaps driving your premium up.

Underwriting Questions Are a Free Security Roadmap

It’s easy to see a cyber insurance application as a hurdle with its pages of questions about MFA, backups, and incident response plans that feel disconnected from actually running your organization. But those questions aren’t arbitrary. They’re built from claims data that shows insurers exactly what causes healthcare breaches, and the fundamentals they ask about are the same fundamentals that would have prevented most of the incidents insurers paid out on last year.

When you treat the application as a checklist to be done with, you miss that it’s actually a free roadmap for where to focus your security budget first.

Work With the Incentive, Not Against It

It’s easy — and common — to assume that insurers are against you, waiting for a breach to happen so they can kick up your premiums, but the opposite is true. It may be helpful to reframe cyber insurance as an opportunity to shore up your security program. When you invest in the fundamentals your insurer is asking about, you’re doing more than chasing a better quote. You’re closing the gaps that would put your patients, operations, and reputation at risk.

GuideIT has spent three decades helping healthcare organizations build security programs that satisfy insurers and, more importantly, hold up against real threats. (Check out this case study about how we helped a senior living organization meet insurance requirements.) If you’re not sure where your organization stands or what your policy already includes, our security leaders would be glad to walk through it with you. Get in touch with us here or learn more about our security partnership.

• ¹ https://actuary.org/article/cyber-insurance-nears-an-inflection-point/
• ² https://agencyheight.com/cyber-insurance-providers-risk-assessment/