Cyber insurance and ransomware
The surge in ransomware campaigns has compelled cyber insurers to rethink their security measures. Ransomware attacks have been a threat for many years, but it was only recently that threat actors realized the significant financial benefits they could reap from such attacks. The rise of ransomware-as-a-service (RaaS) and double extortion tactics has changed the threat landscape, as organizations continue to fall victim and suffer data leaks that are accessible to everyone.
According to a 2024 threat report by Cisco, "Ransomware remains a prevalent threat as it directly monetizes attacks by holding data or systems hostage for ransom. Its high profitability, coupled with the increasing availability of ransomware-as-a-service platforms, allows even less skilled attackers to launch campaigns."
Changing insurance landscape due to ransomware
Cyber insurance is helping businesses to address such threats by offering services such as ransom negotiation, ransom reimbursement, and incident response. Such support, however, comes with a price. The years 2020 and 2021 witnessed a surge in insurance premiums. The Black Hat USA conference, scheduled in Las Vegas, will discuss how ransomware has changed businesses’ partnerships with insurers. Ransomware impacts an organization’s business model.
At the start of the 21st century, insurance firms required companies to buy a security audit to get a 25% policy discount. Insurance back then used to be a hands-on approach. The 2000s were followed by the data breach era; however, breaches were less common and frequent, targeting the hospitality and retail sectors.
This caused insurers to stop checking for in-depth security audits, and they began using questionnaires to measure risk. In 2019, the ransomware wave happened, and insurers started paying out more claims than they were accepting. It was a sign that the business model was inadequate.
Questionnaires tend to be tricky for businesses to fill out. For instance, multifactor authentication (MFA) can be a complicated question to answer. Besides questionnaires, insurers have started using scans.
Incentives to promote security measures
Threats have risen, but so have assessments, coverage incentives like vanishing retention mean that if policy users follow security instructions, retention disappears. Safety awareness training and patching vulnerabilities are other measures that can help in cost reductions. Scanning assessment can help in premium pricing, as it is lower currently.
