Cyber insurance rates are jumping by as much as 25% following a surge of costly claims, according to reports.
Ransomware, a malicious software program used to take control of IT systems, remains a significant problem despite attacks becoming less frequent in 2019, according to cybersecurity experts.
Malwarebytes Labs reported 6% fewer ransomware attacks in 2019 compared to the previous year. However, these cyberattacks are evolving to cause deeper, longer-lasting technological problems.
“Ransomware is more sophisticated and dangerous than we saw in the past,” Adam Kujawa, director of Malwarebytes Labs, told Reuters.
Hackers are demanding larger ransoms to stop their attacks too.
In the third quarter of 2019, the average ransom was $41,198, more than triple the amount from the first quarter, according to Coveware, a company that helps negotiate and facilitate the payments.
Cyber insurance policies offer coverage beyond paying ransoms, including data recovery and legal liabilities.
Given the rising costs, some insurers are considering changes to their policies, according to Reuters.
Allianz is considering price adjustments, and whether ransomware should be a separate product from general cyber coverage, said Kelly Castriotta, Allianz SE North American head of product development for financial lines.
Other insurers, including Sompo International, are considering lowering amounts they pay for ransomware attacks. Brad Gow, a global cyber product leader at Sompo, told Reuters the company might shift to coinsurance, where policyholders would pay 20% to 30% of ransomware claims.
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