“The number of ransomware attacks may even increase before the situation gets better,” says Scott Sayce, Global Head of Cyber at AGCS. “Not all attacks are targeted. Criminals also adopt a scattergun approach to exploit those businesses that aren’t addressing or understanding the vulnerabilities they may have. As insurers we must continue to work with our clients to help businesses understand the need to strengthen their controls. At the same time, in today’s rapidly evolving cyber insurance market, providing emergency response services, as well as financial compensation, is now the standard.”
Cyber intrusion activity globally jumped 125% in the first half of 2021 compared to the previous year, according to Accenture, with ransomware and extortion operations one of the major contributors behind this increase. According to the FBI, there was a 62% increase in ransomware incidents in the US in the same period that followed an increase of 20% for the full year 2020. These cyber risks trends are mirrored in AGCS’ own claims experience. AGCS was involved in over a thousand cyber claims overall in 2020, up from around 80 in 2016; the number of ransomware claims (90) rose by 50% compared to 2019 (60). In general, losses resulting from external cyber incidents such as ransomware or Distributed Denial of Service (DDoS) attacks account for most of the value of all cyber claims analyzed by AGCS over the past six years.
Increasing reliance on digitalization, the surge in remote working during Covid-19, and IT budget constraints are just some of the reasons why IT vulnerabilities have intensified, offering countless access points for criminals to exploit. The wider adoption of cryptocurrencies, such as Bitcoin, which enable anonymous payments, is another key factor in the rise of ransomware incidents.