Cyber insurance is evolving fast as the incidence of data breaches from insider and malicious external threats have become more prevalent. 

Just a few years ago, cyber insurance was considered important because of data breach concerns and protecting organisations’ liability if private data was exposed. Today, the focus is on the potentially huge losses stemming from cyber-crime.

Research carried out by the  UK insurance firm Gallagher polled 1000 UK business leaders in organisations of various sizes and nearly two-fifths (39%) cited cyber-attacks as one of their biggest concerns. Of these, 82% reported  they do not have specialist insurance.

The shift in the number one cause of loss is a result of both the growing sophistication of cyber criminals’ attack methods as well as businesses’ ability to adapt to cyber threats. It calculated the average number of attacks aimed at a single business last year was 576,575, around 152% higher than the 281,094 recorded in 2018 and the highest since the ISP began analysing this kind of data in 2016.

A few years ago, credit card breaches at retailers like Home Depot, with 56 million cards compromised, and Target, with 41 million cards compromised, were making headlines. Today, the number of credit card breaches in the news has dropped off, and that’s because businesses have learned their lesson and adopted end-to-end encryption, among other controls.

Now criminals set their sights on phishing emails, which entice users to click on suspicious links and provide crucial information, and business email compromise, where criminals impersonate employees and management to convince other employees to wire money to nefarious accounts.

Cyber risks have evolved even further. The range of businesses that can become victims of ransomware is broad. In one example highlighted a recent analysis carried out by the Tokio Marine insurance firm, an assistant restaurant manager downloaded an email attachment that looked like a spreadsheet from her manager on to the restaurant’s computer.

Unfortunately, the file contained the Ryuk virus, which blocked access to the operating system and encrypted all the files on the computer.  A message appeared on the computer notifying the manager that the system and all files were encrypted and would only be unlocked if he paid a ransom of more than $200,000 using Bitcoin.

The higher levels of ransom increasingly being demanded by hackers to restore data is a notable trend and insurers are sensitive to the soaring costs of a successful ransom attack. 

Source: Cyber Security Intelligence