RANSOMWARECybercrime Insurance Is Making the Ransomware Problem Worse
Cybercrime insurance is making the ransomware problem worse During the COVID-19 pandemic, there was another outbreak in cyberspace: a digital epidemic driven by ransomware. Businesses are turning to cyberinsurance companies in desperation to protect themselves from attack. But the growth of the cyberinsurance market is only encouraging criminals to target companies that have extortion insurance.
Cybercrime insurance is making the ransomware problem worse During the COVID-19 pandemic, there was another outbreak in cyberspace: a digital epidemic driven by ransomware.
Several organizations worldwide fell victim to cyber-extortionists who stole data either to sell to other criminals or held it as a ransom for a profit. The sheer number of attacks indicates that cyber security and anti-ransomware defenses did not work or have limited effectiveness.
Businesses are turning to cyberinsurance companies in desperation to protect themselves from attack. But the growth of the cyberinsurance market is only encouraging criminals to target companies that have extortion insurance.
A 2021 study from the University of Leeds found there was a massive acceleration in major cyber-attacks on organizations during the pandemic. The paper also showed a “shift in offender tactics which scale up levels of fear in victims … such tactics include a shift towards naming and shaming victims, the theft of commercially sensitive data and attacks targeting organizations which provide services to other organizations.”
A report by global cybersecurity firm Sophos found that 66% of organizations surveyed, from across 31 countries, were hit with ransomware in 2021, up from 37% in 2020. The average ransom paid increased nearly fivefold to US$812,360 (£706,854). Insurance companies often opt to pay the ransoms that cybercriminals demand – 82% of UK companies pay up.
Where Are the Attacks Coming from
According to US think tank the Council on Foreign Relations 22 countries are suspected of sponsoring cyberattacks, including the United States.
And a new black market in which cybercriminals provide products and services to other cybercriminals is flourishing and driving the surge in ransomware attacks. So-called ransomware allows everyone from teenagers to skilled amateurs to professional criminals to rent malware, encryption tools, and even Bitcoin wallets.
It is like a criminal renting a gun from another criminal who manufactured it.
In July 2020, three teenagers hacked Twitter. The attack resulted in the hijacking of 130 accounts – some of which included high-profile targets including Joe Biden, Barack Obama, Apple, Elon Musk and Bill Gates. The bitcoin accounts associated with their ransomware scam received more than 400 transfers totaling over US$100,000 (£87,000).
What’s the Problem with Insurance?
The past few years have seen a surge in specialist cybercrime insurance policies. The global cybercrime insurance market is predicted to grow from US$7 billion in gross written premiums (GWP) in 2020 to US$20.6 billion by 2025.
