Dark Reading is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Risk

11/30/2020
06:05 PM
50%
50%

Driven by Ransomware, Cyber Claims Rise in Number & Value

Companies are on track to file 27% more cyber claims in 2020, one insurer estimates, while another underwriter finds five out of every 100 companies file a claim each year.

Cyberattacks and security incidents have become the top business risk for companies, with the number of insurance claims rising 27% in the first nine months of 2020, according to a report released earlier this month by insurance company Allianz.

Allianz policyholders filed 770 claims in the first nine months of the year, compared with a little more than 800 for all of 2019, the company stated in its "Trends in Cyber Risk" report. In a second report, the company found that while businesses ranked the "cyber incidents" category as the 15th most significant threat seven years ago, it took the top slot in 2020, with 39% of companies considering cyber incidents as the most important risk.

Related Content:

'Act of War' Clause Could Nix Cyber Insurance Payouts

The Changing Face of Threat Intelligence

New on The Edge: 5 Signs Someone Might be Taking Advantage of Your Security Goodness

While part of the growth in claims is due to the overall expansion of the cyber-insurance market, the growing cost of cybercrime to companies is also a major factor, says Josh Navarro, executive underwriter in the Cyber and Professional Liability group for Allianz Global Corporate & Specialty (AGCS).

"A growing 'commercialization of cyber-hacks' is a contributing factor leading to a growth in ransomware claims in particular," he says. "Increasingly, criminals are selling malware to other attackers who then target businesses demanding ransom payments, meaning high-end hacking tools are more widely available and cheaper to come by."

Allianz is not the only insurer to see a jump in ransomware claims. Ransomware attacks accounted for 41% of policyholder claims, insurer Coalition stated in its 2020 "Cyber Insurance Claims Report," released in September. Those ransomware incidents also grew more serious, with the dollar value of the average ransom demand doubling in a year, according to the insurer. 

"Although the frequency of ransomware claims has decreased by 18% from 2019 into the first half of 2020, we've observed a dramatic increase in the severity of these attacks," Coalition stated in its report. "The ransom demands are higher, and the complexity and cost of remediation is growing."

The trend toward more costly and numerous claims is also driven by the increased exodus of employees from offices to their homes in response to the coronavirus pandemic. While attackers targeted companies with an increased volume of phishing attacks, gaps in security measures — such as a lack of multifactor authentication or VPN access — left workers more vulnerable, AGCS's Navarro says.

"Many companies were left unprepared for a high level of remote access, and gaps in security controls and procedures create an environment with increased exposure to bad actors," he says. Add to that, "employees are not always following best practices in a remote environment, [which] increases the potential for phishing events to be successful, as well as data leakage."

Overall, Allianz's analysis of its cyber claims found that business interruption drove losses higher. Business interruption took second place in the insurer list of top risks, with 37% of companies rating it the top threat.

While ransomware accounted for a great deal of business interruption, human error was the most frequent threat, although with a much lower overall cost to the business. Accidental internal incidents account for 54% of all claims, but only 6% of the value of losses, meaning incidents had one-ninth the average cost. Malicious internal actors accounted for 3% by volume but 9% by value or triple the average per incident, and malicious external attacks accounted for 43% by volume and 86% by value, or about twice the average.

Some attacks, such as NotPetya, caused such high damages that companies claimed as much as $1.3 billion, and which insurers declined payment, citing "act of war" clauses in the policies.

The claims data also showed that larger companies are hit with greater frequency than smaller companies, although smaller companies are far more numerous. Consumer retailers topped the list of targeted industries, accounting for 28% of all claims, while professional services accounted for 16% and healthcare accounted for 12% of claims, according to Coalition's report.

Still, AGCS's Navarro recommends that companies train their employees in best practices, especially phishing-awareness training, and use multifactor authentication, which insurer Coalition noted would have stopped the majority of attacks that led to claims. Finally, other technologies, such as network segmentation, can minimize the damage from an attack and make intruders easier to detect.

"Companies of all sizes need to invest heavily in a multipronged cybersecurity program," says Navarro. "Cross-sector exchange and cooperation among companies ... is also key when it comes to defying highly commercially organized cybercrime, developing joint security standards, and improving cyber resilience."

Veteran technology journalist of more than 20 years. Former research engineer. Written for more than two dozen publications, including CNET News.com, Dark Reading, MIT's Technology Review, Popular Science, and Wired News. Five awards for journalism, including Best Deadline ... View Full Bio
 

Recommended Reading:

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
When It Comes To Security Tools, More Isn't More
Lamont Orange, Chief Information Security Officer at Netskope,  1/11/2021
US Capitol Attack a Wake-up Call for the Integration of Physical & IT Security
Seth Rosenblatt, Contributing Writer,  1/11/2021
IoT Vendor Ubiquiti Suffers Data Breach
Dark Reading Staff 1/11/2021
Register for Dark Reading Newsletters
White Papers
Video
Cartoon
Current Issue
2020: The Year in Security
Download this Tech Digest for a look at the biggest security stories that - so far - have shaped a very strange and stressful year.
Flash Poll
Assessing Cybersecurity Risk in Today's Enterprises
Assessing Cybersecurity Risk in Today's Enterprises
COVID-19 has created a new IT paradigm in the enterprise -- and a new level of cybersecurity risk. This report offers a look at how enterprises are assessing and managing cyber-risk under the new normal.
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
CVE-2021-3113
PUBLISHED: 2021-01-17
Netsia SEBA+ through 0.16.1 build 70-e669dcd7 allows remote attackers to discover session cookies via a direct /session/list/allActiveSession request. For example, the attacker can discover the admin's cookie if the admin account happens to be logged in when the allActiveSession request occurs, and ...
CVE-2020-25533
PUBLISHED: 2021-01-15
An issue was discovered in Malwarebytes before 4.0 on macOS. A malicious application was able to perform a privileged action within the Malwarebytes launch daemon. The privileged service improperly validated XPC connections by relying on the PID instead of the audit token. An attacker can construct ...
CVE-2021-3162
PUBLISHED: 2021-01-15
Docker Desktop Community before 2.5.0.0 on macOS mishandles certificate checking, leading to local privilege escalation.
CVE-2021-21242
PUBLISHED: 2021-01-15
OneDev is an all-in-one devops platform. In OneDev before version 4.0.3, there is a critical vulnerability which can lead to pre-auth remote code execution. AttachmentUploadServlet deserializes untrusted data from the `Attachment-Support` header. This Servlet does not enforce any authentication or a...
CVE-2021-21245
PUBLISHED: 2021-01-15
OneDev is an all-in-one devops platform. In OneDev before version 4.0.3, AttachmentUploadServlet also saves user controlled data (`request.getInputStream()`) to a user specified location (`request.getHeader("File-Name")`). This issue may lead to arbitrary file upload which can be used to u...