ARE INSURANCE COMPANIES FUELLING RANSOMWARE ATTACKS?

Defense One on 4th September reported that, even when public agencies and companies hit by ransomware could recover their files on their own, insurers prefer to pay the ransom.  Why? One victim was aware of the efforts to recover backup files but preferred to have the insurer pay the ransom because it was less expensive for the victim.  The article says that cyber insurance sold by domestic and foreign companies has grown into an estimated $7 billion to $8 billion-a-year market in the US alone and research has found that has they often accommodate attackers’ demands, even when alternatives such as saved backup files may be available.  For insurers, the article says, it makes financial sense, according to industry insiders said.  It holds down claim costs by avoiding expenses such as covering lost revenue from snarled services and ongoing fees for consultants aiding in data recovery.  And, by rewarding hackers, it encourages more ransomware attacks, which in turn frighten more businesses and government agencies into buying policies.  Insurers approve or recommend paying a ransom when doing so is likely to minimize costs by restoring operations quickly, regulators said, but the article says that as insurance companies have approved 6- and 7-figure ransom payments over the past year, criminals’ demands have climbed.

https://www.defenseone.com/ideas/2019/09/insurance-companies-are-fueling-ransomware-attacks/159625

This blog is primarily for my own use, to keep informed and up to date. However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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