Cyber Insurance rates to Increase by 25%

The U.S. insurers are increasing the cyber insurance rates by as much as 25% and trying to curb the exposure to vulnerable customers after an increase of costly claims, industry sources said.

 

New changes are met to deal the ransomware. It’s a challenging year of hackers using a malicious programs, known as ransomware, in order to take down systems that control everything from hospital billing to manufacturing. And they stop only after receiving increasingly hefty payments.

 

These type of cyber-attacks happened less frequently in 2019, but cybersecurity experts said, the problem remains significant.

The director of Malwarebytes Labs, Adam Kujawa said,

“Ransomware is more sophisticated and dangerous than we saw in the past,”

 

There were 6% less ransomware incidents in 2019 versus the prior year, according to Malwarebytes. But still the attacks are now designed to spur the deeper and more lasting technological problems with hackers demanding bigger sums.

 

According to Coveware, the average ransom of $41,198 during the 2019 third quarter, more than tripled from the first quarter that helps negotiate and facilitate the payments.

 

The Ransoms are becoming disproportionate to the size of targets, said Kelly Castriotta, Allianz SE North American head of product development for financial lines.

Most of the hackers frequently pursue the mid-size companies and other organizations that are less technologically adept, but also have less revenue to cover big ransoms.

 

“You’d expect a ransomware demand that you can pay,” Castriotta said.

 

The U.S. rate increases underscore broader global ransomware problems from which no company is immune.

 

Ransomware recently crippled foreign-exchange firm Travelex Ltd’s systems for weeks, leaving staff to serve customers with pens and paper. Hackers demanded $6 million, the BBC reported. Travelex declined to comment.

 

Another attack in December paralyzed the Albany County Airport Authority‘s administrative computers. It had to pay $98,705.96 in Bitcoin to get the system unlocked, a spokesman told Reuters. Its insurer, Chubb Ltd, covered the ransom, he said. Chubb declined to comment.

 

Cyber-insurance premiums started rising 5% to 25% late last year, said Robert Parisi, U.S. cyber product leader at Marsh & McLennan Companies Inc.

 

He called the increases “dramatic” but said insurers have not scaled back coverage.

 

Cyber policies often cover not just ransom, but data recovery, legal liabilities and negotiators fluent in hackers’ native languages. Some insurers are considering changes, given the rising cost.