A new report by Coinnect has highlighted how ransomware attacks are impacting the insurance sector, as companies are forced to address multiple issues related to assessing their customers’ cyber risks and determining the potential impact of an attack.
The report, titled “Ransomware Intelligence Global Report 2023,” finds that ransomware is the leading cause of cyber insurance claims and that this is a trend that is expected to continue into the future.
Coinnect notes that one of the main reasons ransomware attacks are becoming more sophisticated is that attackers are using increasingly advanced techniques to evade detection and encrypt corporate data. This makes it harder for organizations to prevent and recover from these attacks.
Another reason highlighted was that many small and medium-sized businesses are particularly vulnerable to ransomware attacks. This is because they lack the resources and expertise they need to protect themselves effectively. This therefore makes them an attractive target for attackers who are aware that these organizations are more likely to pay ransoms to regain access to their data.
Both of these factors mean that ransomware attacks are having a major impact on the insurance industry as companies struggle to assess their customers’ cyber risks and determine the potential impact of a ransomware attack.
Coinnect states that this must be assessed based on several factors such as the type of data encrypted, the systems affected and the organization’s ability to recover from the attack.
Additionally, as claims related to ransomware attacks increase, insurers are being forced to charge higher premiums to cover the costs.
The insurance industry plays an important role in helping organizations mitigate and respond to these risks, and insurance policies that cover cyberattacks are becoming increasingly important.
However, Coinnect adds that the insurance industry needs to take “proactive steps” to assess and mitigate their customers’ cyber risk. This includes offering technical solutions for cyber risk assessment and proactive mitigation to help organizations identify, mitigate and respond to vulnerabilities and attacks.
Coinnect says, “The insurance industry should offer a comprehensive approach to cyber risk management, combining these solutions with insurance policies to help protect organizations from the potentially devastating consequences of a ransomware attack.”
Meanwhile, data released in late 2022 by cyber specialist Corvus Insurance found that fraudulent fund transfers (FFT) and ransomware were the top causes of cyber losses throughout the year, together accounting for over 50% of all claims.