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Insurance companies run from ransomware protection when losses increase



(Reuters) – Insurance companies have halved the amount of cyber protection they provide customers after the pandemic and domestic work drove an increase in ransomware attacks that stung them from substantial payments.

Facing increased demand, major European and American insurance companies and sin operating in the market Lloyd & # 39 ;s of London has been able to charge higher premium prices to cover ransoms, repair of hacked networks, losses of business interruptions and even PR fees to repair damage to reputation.

But the increase of ransomware. attacks and the growing sophistication of attackers have made insurance companies cautious. Insurance companies say some attackers can even check to see if potential victims have insurance policies that would make them more likely to pay out. "Borders have been halved ̵

1; where people offered £ 10 million ($ 13.50 million), almost all of them have been reduced to five."

its 100s syndicate members from taking on cyber deals next year, industry sources said on condition of anonymity. Lloyd & # 39 ;s declined to comment.

U.S. The insurance company American International Group Inc. also said in August that they are cutting cyber boundaries.

Ransom software works by encrypting victims' data and usually hackers offer victims a password to retrieve it in exchange for cryptocurrency payments.

It has become optional attack for cybercriminals, who previously preferred to steal data and sell it to third parties.

Suspected payments of ransomware totaling $ 590 million were made in the first six months of this year, compared to the $ 416 million reported for the whole of 2020, US authorities said in October.

In one of the biggest robberies, a ransomware attack closed against Colonial Pipeline in May the largest fuel pipeline network in the United States for several days.

United States. the profits of cyber insurance companies decreased in 2020, stated the insurance broker Aon PLC. Combined ratio – a measure of profitability where a level of more than 100% indicates a loss – rose by more than 20 percentage points from 2019 to 95.4%.

While insurance companies struggle to survive, companies are underinsured.

"People are very unlikely to get the same limits – if they do, they will pay an extraordinary amount," said David Dickson, chief executive of brokerage firm Superscript.

$ 1 million and $ 3 million in 2021, found a report last month by US broker Risk Placement Services.

An EU report released in October said the covid-19 pandemic and the increase in domestic work had made it possible for cybercriminals to flourish.

Meanwhile, the cyber security company Coveware compared the profit margin of over 90% from ransomware attacks this year to the profits of Colombian cocaine cartels in 1992.

Where hackers previously took a proliferation method using has become more targeted, reading balance sheets and focusing on specific sectors.

Tom Quy, head of cyber practice at reinsurance broker Acrisure Re, said the attacks were moving away from healthcare facilities and municipalities – which have weak IT control but also some money – to manufacturing and logistics companies.

Such companies have deep pockets and can not afford longer breaks to fix their systems, so they would rather pay ransoms, especially if they have insurance to cover them.

"We advocate for everyone that you do not disclose your insurance because "It's crucial to your business," said Scott Sayce, global cyber director at Allianz Global Corporate & Specialty. " insurance broker Marsh. The RPS said that the prices of some insurances had risen by as much as 300%.


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