The recent ransomware disruption of the Colonial Pipeline and meat-packer JBS highlights the ongoing problems caused by cyberattacks.
One prominent reason for the increase in attacks is that more companies are paying the ransom, according to experts. And cybercriminals are taking advantage of the get-rich-quick scheme.
For insurers, paying a ransom claim is often more appealing than paying the costs associated with their policyholders restoring compromised systems and potential lost business.
Criticisms have leveled against insurance coverage for ransom payments for years since it makes victims more likely to pay criminals.
While the insurance carrier AXA announced that it would stop covering ransom payments for cyber insurance policies in France, it appears that the cycle of million-dollar ransom payments will not end soon.
In 2020, healthcare organizations saw the number of ransomware attacks increase 55%.
An article on WIRED examined the role of insurance carriers in responding to ransomware attacks that show few signs of abating.
Cyberinsurance carriers acknowledge that they have seen a growing number of claims for ransomware attacks and that they offer coverage for ransom payments, but, understandably, neither they nor their customers are eager to publicize just how often they cover ransom payments or how much they payout in these cases. That’s partly because they don’t want to attract attention from regulators and others trying to discourage the payment of ransoms, and partly because they don’t want to attract the attention of cybercriminals who might use that information to target organizations with good cyberinsurance coverage. DarkSide, the group believed to be responsible for the Colonial Pipeline attack, reportedly searches the systems it infiltrates—prior to encrypting them with ransomware—to find information about the victims’ cyberinsurance coverage, and adjusts ransom demands accordingly.
“I don’t think insurers have given up on [insuring ransomware] yet, or that the risk is unmanageable, but it’s certainly taken its toll in the past year and beyond,” Matthew McCabe, a senior adviser at global insurance broker Marsh, told WIRED.
Chivaroli and Associates Insurance Services is a full-service brokerage firm specializing in the custom-design and placement of insurance and alternative risk funding solutions for your healthcare organization.