In its “2023 Cyber Claims Report: Mid-year Update,” Coalition, a leading Active Insurance provider for digital risk prevention, reveals a concerning 12% increase in cyber claims during the first half of 2023, driven by rising ransomware attacks and funds transfer fraud.
The Mid-year Update underscores the broadening impact of cyber threats, as both the frequency and severity of cyber claims witnessed an upsurge across all revenue bands during early 2023. Notably, companies with annual revenues exceeding $100 million reported the largest increase, with a staggering 20% rise in the number of claims and a 72% spike in the severity of these incidents compared to the latter half of 2022.
“The cyber threat landscape has become more volatile, and, as a result, we’ve seen claims become more severe and more common than ever,” warned Chris Hendricks, Head of Coalition Incident Response.
Hendricks emphasised the importance of organisations taking proactive measures to enhance their security defenses and make risk management a paramount priority, underscoring that they don’t need to go it alone, with partners like Coalition offering support before, during, and after cyber incidents.
Ransomware attacks, in particular, have reached alarming levels in 1H 2023, with a 27% increase in claims frequency compared to the latter half of 2022. The severity of ransomware incidents reached record heights, surging by 61% over the previous half-year and a staggering 117% year-on-year.
Equally concerning is the increase in ransom demands, which soared to an average of $1.62 million—a 47% increase in the past six months and a 74% rise compared to last year.
Remarkably, Coalition’s Active Cyber Insurance played a pivotal role in mitigating these threats, recovering an unprecedented $23 million in stolen funds, all of which were returned directly to policyholders.
Notably, the total FTF recovery amount exceeded that of 2H 2022 by nearly threefold, with an average recovery amount of $612,000 per FTF claim, constituting 79% of all FTF losses in cases where recovery was possible.
Additional key findings from the report include a 15% increase in FTF claims frequency in 1H 2023, accompanied by a 39% escalation in FTF severity, resulting in an average loss of over $297,000. Moreover, Coalition’s negotiations led to a significant reduction in ransomware payments, lowering the average ransom paid to 44% of the initial demand.
The report also unveiled an intriguing insight into email platform security, with businesses using Google Workspace outperforming their counterparts using Microsoft Office 365 (M365) and on-premises Microsoft Exchange.
M365 users were more than twice as likely to experience a claim compared to Google Workspace users, while on-premises Microsoft Exchange users were nearly three times more susceptible.
Overall, companies employing Google Workspace experienced a 25% risk reduction for FTF or Business Email Compromise (BEC) claims and a 10% risk reduction for ransomware claims, underlining the importance of robust cybersecurity choices in today’s digital landscape.
