Ransomware and Supply Chain Attacks Drive Rising Cyber Insurance Claims
Agency Check List – Owen Gallagher
According to a new report from global insurer Allianz, cyber insurance claims have increased in 2023 due to a resurgence in ransomware attacks and mass hacks exploiting vulnerabilities in software supply chains.
Ransomware claims rose by 50% in early 2023 after a stabilization in 2022.
Attackers are now using data theft and supply chain exploits to maximize their leverage in extortion attempts.
Data exfiltration has become a common practice, with the proportion of attacks involving stolen data doubling from 40% in 2019 to nearly 80% in 2022.
Uncontained data theft leads to higher costs for notification, monitoring, regulatory fines, and reputation repair.
Supply chain attacks, where criminals target IT providers to access their customers’ systems, have also increased in frequency.
These trends pose concerns for insurers due to the potential accumulation of risk.
A large-scale software attack can trigger multiple claims from interconnected policyholders simultaneously.
Allianz recommends that policyholders focus on improving detection and response capabilities, as prevention alone is no longer sufficient.
Early threat detection technology can help mitigate the escalating costs of breaches.
The report advises directing more security budgets towards detection tools like intrusion prevention systems and security information management software.
Rapid response is crucial to minimize costs once data is encrypted or stolen, so having response plans and breach services in place is advantageous.
For smaller firms with limited security resources, Allianz emphasizes the importance of understanding potential risks, allocating budget for tailored security measures, and partnering with managed security providers.
The report highlights that while prevention is still essential, companies must prioritize early threat detection and response capabilities.
Insurers are likely to adjust their products and underwriting practices based on these evolving cyber risks.
The full Allianz report provides comprehensive insights into the latest cyber security threats and risk mitigation best practices.
Link: https://agencychecklists.com/2023/11/13/ransomware-and-supply-chain-attacks-drive-rising-cyber-insurance-claims-68701/