US insurers are hiking cyber premiums by as much as 25% in some cases following a surge of costly ransomware claims, according to reports from Reuters.
The rate increases come as many insurers look to reduce their exposure to these forms of cyber attacks, which are becoming increasingly sophisticated and dangerous.
Ransomware attacks happened less frequently in 2019, but are now designed to cause more damaging technological issues, with larger sums of money often demanded.
According to industry data, there were 6% fewer ransomware incidents in 2019 versus the prior year, but the average ransom cost more than tripled between the first and third quarter of 2019 alone.
Kelly Castriotta, North American head of product development for financial lines at Allianz, told Reuters that ransoms are becoming disproportionate to the size of their targets.
“You’d expect a ransomware demand that you can pay,” Castriotta said, noting that attacks are increasingly focused on smaller organisation that have less secure technology systems, but also less ability to cover large ransom demands.
Robert Parisi, U.S. cyber product leader at Marsh & McLennan Companies Inc, told the publication that the recent premium hikes were “dramatic,” but added that insurers on the whole do not appear to have scaled back their coverage.
Instead, many companies are now considering whether to separate ransomware into a separate product from general cyber coverage, or to exclude firms that do not have adequate security features in place.
