Ransomware Attack Demands Cause Cyber Insurance Claim Amounts To Skyrocket

The perfect storm of large enterprises, cyber insurance policies, successful ransomware attacks, and ransom demands in the tens of millions now consistently result in seven-figure claim amounts.

Insurers of cyber policies are a great indicator around whether the security posture of most organizations is sound or not. And from the look of things, some of you could use some help. Tamara Ashjian, Director of Claims at Tokio Marine HCC – Cyber & Professional Lines Group recently spoke with Insurance Business about the current state of cyber insurance claims.

The trend seems simple enough; a few years ago, according to Ashjian, there were very few claims and most were in the $10,000 range. In 2019, claims climbed to just above the $500,000 range, and in 2020 claim payouts jumped significantly between $3 million and $5 million.

The expectation is that this amount will only go up, putting additional pressure on insurers to make sure their insureds have proper security in place.

According to Ashjian, “the number one way that hackers gain access to insureds’ systems is via employee error or negligence,” detailing that “threat actors typically gain access to a network through a phishing scheme, where the employee receives a spoof email or call and is tricked into providing their credentials.”

Employees and phishing don’t mix well, as phishing is the number one threat action used in data breaches and remains tied with remote desktop as the number one initial attack vector for ransomware attacks. Employees undergoing Security Awareness Training understand how to quickly identify phishing attacks and suspicious email content, reducing the risk of successful attack.

The less expensive course is to shore up your security, rather than try to get your cyber insurer to pay your claim. Your users need to be a part of that security model and Security Awareness Training is the answer.

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