The use of ransomware in cyberattacks by hackers are soaring at an alarming rate!
These hackers cripple our business technology systems from supply chain to payments to manufacturing. They use ransomware and sophisticated malware programmes and will only stop when their ransom demands are met.
According to a Reuters report, businesses reported a 365%increase in such attacks in the second quarter of this year compared to the same quarter last year.
Lloyd’s of London insurer Beazley experienced a 37% increase in ransomware incidents in the third quarter over the previous three months. They expect to handle double to triple the number of ransomware incidents in 2019 compared to last year, including another 800 claims by year-end. Small businesses which outsource IT functions to service providers are particularly vulnerable to ransomware attacks. These form the bulk of Beazley’s claims.
Chubb Ltd faced as many ransomware claims for the first half of 2019 as they did for the whole of 2018.
Companies face massive costs associated with cyberattacks.
In March 2019, the LockerGoga strain of ransomware paralyzed Norsk Hydro’s systems. To date, American International Group Inc has paid out $3.6 million to the Norwegian aluminium maker with more payouts expected. Norsk Hydro reported related losses of $60.1 million to $71.1 million during the first half of 2019 following the cyberattack.
Sompo are fielding a number of claims relating to a ransomware strain known as “Ryuk”. This strain of ransomware is suspected to originate from Russia and Eastern Europe. Hackers target companies with annual revenue in excess of $500 million and demand as much as $5 million in bitcoin according to a FBI source.
On average, insurers typically pay $2 million for claims from large companies and between $150,000 to $250,000 from smaller companies. One insurer, FM Global, does not pay for ransoms.
Global insurers collected $7 billion to $8 billion in cyber-insurance premiums in 2018. However, they are grappling with pricing as ransomware attacks become more prevalent. The simple solution is to pay the ransom but it also emboldens hackers. A specialist lawyer dealing with cyberattack claims remarked that it is a hard problem to solve if people keep paying ransoms and the systems keep getting compromised!
This brings us to the question of loss prevention? How do you protect yourselves from cyberattacks?
In our next issue on CYBERSECURITY, we examine the measures which you can take to mitigate your risks.