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Industry Insights with Larry Baldino: The role of cyber insurance in protecting from ever-evolving threats
The world is consistently changing and all we can do as a cyber market is try to stay one step ahead. It's not good enough to keep up, you have to consistently stay in front of technology risks.
Larry Baldino, President of Cyber and Technology for DUAL North America, is strategically supporting the growth of DUAL Cyber, expanding the program’s footprint in new segments, and reshaping the way our partners think about risk management. As DUAL evolves alongside a fragmented cyber market, Larry shares his insight into the challenges the market has presented and the successes the team has achieved.
The ever-growing risk of cybertechnology
Risk management and insurance protection against cyber threats is essential for all businesses. According to the FBI’s annual IC3 report, there was a 33% increase in losses from 2023 to 2024, where the US saw 859,532 complaints of suspected internet crime and reported losses of more than $16 billion. Each day can bring new challenges, new risks that are being designed to threaten businesses. Threats like business email compromise attempts, leadership impersonation scams, phishing, and so many more. When the average global cost of a data breach is $4.4 million (IBM), businesses must be ramping up their cybersecurity to shield against an online world that never stops evolving.
Technology is changing faster than ever, and so are cyber threats. While AI can certainly offer preventative benefits in cybersecurity, challenges to cybersecurity have become more difficult to predict and prevent. In fact, 85% of cybersecurity leaders attribute upticks in cybercrime to the rise of bad actors utilizing generative AI for their attacks (CFO). Even in businesses where the proper controls are in place, there can still be vulnerabilities exposed by cyber attacks, especially those that use sophisticated AI communications and programs that may be nearly indistinguishable from real requests in the workplace. Organizations are catching up to the idea that they need enhanced protections, as noted in the World Economic Forum’s Global Security Outlook survey, roughly 47% of organizations rank adversarial generative AI developments as the most pressing concern to their business, reflecting its potential to facilitate more advanced cyberattacks. So, how can businesses build up their defenses to such a wide array of unpredictable threats?
Protection and empowerment resulting from cyber insurance
No business is safe from cybersecurity threats. The interconnected nature of modern cybersecurity means that no business stands alone; no risk exists in isolation. With 30,000 new security vulnerabilities identified in 2024 (Cybersecurity), risks are only increasing in number and impact as artificial intelligence offers attackers enhanced abilities to emulate communications or launch sophisticated scams. But bad actors aren’t the only ones using AI. While it can empower attackers, it can also support businesses in enhancing their defenses.
More than just acting as a tool to monitor for threats or safeguard from attacks, one of the main uses of AI for many businesses is to increase efficiency across a wide range of applications. But for cyber insurance, a world where machine learning underwriting is making decisions solely based on an algorithm would be problematic. Any tools with artificial intelligence should be used only to enhance and empower underwriters' abilities, never to replace them. While certain tools can be used to extract patterns from large sources of data to then increase decision-making, underwriters have the ability to actively engage with clients, to understand the nuance surrounding each unique risk exposure.
A world where everything is either accepted or excluded based solely on a machine learning algorithm, without the expertise of human underwriters, would not provide the same level of protection against cyber risks, especially when artificial intelligence has exacerbated the claims frequency for all types of organizations.
DUAL’s expansion in response to market conditions
In a market where many cyber insurance providers are scaling back, DUAL Cyber has recently significantly expanded our cyber and technology risk offerings through a new strategic multi-carrier partnership. With this expansion, we’re able to provide our broker partners and insureds with coverage for cyber and technology risks on a much larger scale, with primary coverage now available for risks with revenues up to $1 billion (increased from $250 million), and policy limits have doubled from $5 million to $10 million. Additionally, the team offers excess coverage with up to $15 million in limits for risks with revenues up to $5 billion. These enhanced capabilities are available across more than 700 NAIC codes, designed to meet the growing variety of demand for cyber solutions.
While an expert response and coverage plan can make a huge difference for businesses, DUAL also acts as a partner in risk management to support the prevention of cyberattacks before they can threaten a bottom line. To that end, DUAL has also partnered with several strategic risk management providers to offer detailed security insights and ongoing monitoring for clients. This addition complements DUAL’s existing suite of proactive services, which includes 24/7 assistance and access to a panel of expert vendors for penetration testing and incident response. Ultimately, by providing these reinforced defenses to our clients, we hope to support their overall protection, for a safer future. Our underwriters are disciplined and forward-thinking, always using data to provide meaningful service and tailored coverage not just built for today’s cyber threats, but for tomorrow’s unknown risks.
DUAL is expanding in a really exciting time to be in the cyber space, where we have to constantly be adapting to continue to strengthen immunity against ever-evolving cyberattacks.
How can big businesses combat cyber risks
Underwriting cyber insurance is a unique proposition, where each risk presents its own unique exposures that must be accounted for. High hazard operations with great controls can go loss-free, while low-hazard risks with less robust controls can present high level loss challenges. Each day brings new exposures, requiring our expert team to have adaptability and grit. Through a consistent feedback loop with claims, insights from historical incidents inform future protocols, such as putting together a panel of the next generation of software tools to give clients relevant support.
Through risk management tools and employee education, businesses can take proactive actions to protect themselves from cyber exposures. No single strategy will ensure complete protection from cyber risks. After all, employees are busy. It only takes a second to click on the wrong link or fall prey to a legitimate-looking scam, especially when distracted by daily tasks. There’s no way to fully prevent cyberattacks, the same way there’s no way to fully prevent an illness like the flu, but there are ways to lessen the impact and ensure a swift recovery.
With more innovations on the horizon, DUAL Cyber is expanding our footprint and deploying even larger offerings to protect against a world that’s always on. We’re crafting solutions tailored to each client, responding to insights and staying ahead of evolving cyber threats. Our goal is to provide meaningful cybersecurity, not just in terms of coverage, but also by ensuring access to pre-breach tools and incident response services. As the market continues to observe and anticipate what these advancements in technology and geopolitical events will do to the overall landscape, our job is not to keep up, but rather to consistently stay one step ahead.
Preventing all instances of cyber loss is impossible. Similar to public health, everyone faces exposure to threats like the flu. In business, the question isn’t how to avoid cyber threats altogether, but how to minimize the impacts when a cyber incident does occur.
For more information about the program, visit our DUAL Cyber page.
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