No insurance premiums saw greater growth in the second quarter of 2021 than those related to cybersecurity. According to the Council of Insurance Agents & Brokers, cyber insurance premiums grew more than a quarter (25.5%) during that period. That’s well above the 17.4% increase witnessed by umbrella insurance and an average of 8.3% growth across all premiums. In part, that’s because of ransomware. What can your business do about it?
What’s Behind This Growth of Cyber Insurance Premiums?
No other factor had as much of an impact on cyber insurance premiums for Q2 2021 as ransomware. Part of the reason for this has to do with the growth of ransomware attacks in recent months. According to ITProPortal, global ransomware volume reached 304.7 million attack attempts in the first half of 2021. That’s 0.1 million more attempted infections for all of 2020. Nearly two-thirds (64%) of those campaigns involved the Ryuk, Cerber or SamSam families, with government, education, health care and retail groups seeing triple-digit growth in the number of ransomware attacks that affected them during that period.
At the same time, ransomware costs have risen. In its Cost of a Data Breach Report 2021, for instance, IBM observed that ransomware attacks cost an average of $4.62 million. Those damages, which included escalation, notification, lost business and response (but not ransom payments), eclipsed the $4.24 million price tag for the average data breach.
Rising Ransomware Costs
Some factors drove these rising ransomware costs more than others. Remote and hybrid work stood out. In the words of Gallagher, “exploiting the remote workforce was the leading cause of ransomware claims during the pandemic.” That’s a problem, as remote and hybrid work isn’t going anywhere anytime soon. Forbes wrote that 70% of the workforce will be working remotely in some form by 2025, for example. Gartner noted that 74% of chief financial officers planned to permanently shift employees to remote work following the events of 2020.
So, victims turned to a cyber insurance provider to cover their ransomware costs in the age of hybrid and remote work. Beyond those damages, 64% of insurers said their clients relied on an insurer to help them pay following a ransomware attack. One client said that they witnessed “30+ [payouts] in the first half of the year alone”.
How to Prevent Ransomware
Many insurers don’t pay the full amount of a security incident. Therefore, cyber insurance payouts can help only so much. As I wrote before, cyber insurance could also be making ransomware worse. Hence the need to implement security best practices — especially when it comes to defending against ransomware.
First, think carefully about keeping legacy systems connected to your networks. If you don’t upgrade or replace them, your business or agency could be open to attack. Instead, implement compensating controls or preventative measures designed to limit access to them. Consider working with penetration tests to gauge the level of risk.
Second, achieve visibility over assets. Visualize those resources that store business-critical information. With that knowledge, security teams can prioritize those assets. That works better than trying to protect everything all at once.
Finally, organizations need to consider using threat intelligence to defend against emerging ransomware attacks. Security teams can use threat intelligence to monitor their network for Indicators of Compromise and other signs of attack. At the same time, they can use threat intelligence to educate their employees about evolving ransomware attacks. That training should include the channels on which they rely for distribution, extortion techniques and active campaigns to help them contribute to their employers’ security postures.