A new report from Coinnect has highlighted how ransomware attacks are creating repercussions for the insurance sector, as companies are being forced to deal with several issues related to the assessment of their customers’ cyber risks and the determination of the potential impact of an attack.
The report, titled, ‘Ransomware Intelligence Global Report 2023’ states that ransomware is the leading cause of cyber insurance claims, and that this is a trend that is expected to continue in the future.
Coinnect notes that one of the main reasons why ransomware attacks are becoming more sophisticated is because attackers are using increasingly advanced techniques to avoid detection and encrypt corporate data. This winds up making it more difficult for companies to prevent and recover from these attacks.
Another reason that was highlighted, was that many small and medium-sized enterprises are particularly vulnerable to ransomware attacks. This is due to them lacking the resources and expertise that they need to effectively protect themselves. Therefore, this makes them an attractive target for attackers, who are aware that these organisations are more likely to pay ransom to regain access to their data.
Both of these factors means that ransomware attacks are making a big impact on the insurance industry, as companies are facing increasing difficulties in assessing their customers’ cyber risks and determining the potential impact of a ransomware attack.
Coinnect states that this must be evaluated on the basis of several factors such as the type of encrypted data, the affected systems, and the organisation’s ability to recover from the attack.
Additionally, as the number of claims related to ransomware attacks increases, insurers are being forced to charge higher premiums to cover the costs.
The insurance industry plays an important role in helping organisations mitigate and respond to these risks, and insurance policies covering cyber-attacks are becoming increasingly important.
However, Coinnect adds that the insurance industry must adopt “proactive measures” to assess and mitigate its customers’ cyber risk. This includes offering technical solutions for cyber risk assessment and proactive mitigation to help companies identify, mitigate and respond to vulnerabilities and attacks.
Coinnect saids: “The insurance industry should provide a comprehensive approach to cyber risk management by combining these solutions with insurance policies, thus helping to protect organisations from the potentially devastating consequences of a ransomware attack.”
Meanwhile, data released from cyber specialist Corvus Insurance in late 2022, found that fraudulent funds transfer (FFT) and ransomware were the top drivers of cyber loss throughout the year, accounting for over 50% of all claims combined.