Improvements in cyber security and business continuity are helping to combat encryption-based ransomware attacks, yet the cyber threat landscape is continually evolving. 2023 has seen a worrying resurgence in ransomware and extortion claims, resulting in an uptick in costly incidents, demonstrating that although progress is being made, the threat posed by ransomware shows little sign of abating.
Reports note that the number of ransomware victims surged by as much as 143% globally during the first quarter of 2023 with January and February seeing the highest number of hack and leak cases in three years. Ransomware alone is projected to cost its victims approximately US$265bn annually by 2031.
Hackers are increasingly targeting IT and physical supply chains, launching mass cyber-attacks and finding new ways to extort money from companies, large and small. Most ransomware attacks now involve the theft of personal or sensitive commercial data for the purpose of extortion, adding further cost and complexity, as well as the increased potential for reputational damage and third-party liability. Allianz analysis of a number of large insurance industry cyber losses shows that the proportion of cases in which data is exfiltrated is increasing every year – from 40% of cases in 2019 to around 77% of cases in 2022, with 2023 on course to surpass last year’s total.
Protecting an organization against intrusion remains a cat and mouse game, in which the cyber criminals have the advantage. Threat actors are now exploring ways to use artificial intelligence (AI) to automate and accelerate attacks, creating more effective AI-powered malware and phishing. Combined with the explosion in connected mobile devices and 5G-enabled Internet of Things, the avenues for cyber-attacks look only likely to increase in the coming years.
Preventing a cyber-attack is therefore becoming harder, and the stakes higher. As a result, early detection and response capabilities are becoming ever more important. An intrusion can quickly escalate, and once data is encrypted and / or stolen, the consequences and costs snowball – costs can be as much as, or even more than, 1,000 times higher than if an incident is not detected and contained early, Allianz analysis shows.
Ultimately, early detection and effective response capabilities will be key to mitigating the impact of cyber-attacks and ensuring a sustainable insurance market going forward.
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