Insurance costs have doubled for cybersecurity breaches amid an onslaught of ransomware attacks globally, according to global consultancy AON.
The report, Cyber Insurance Market Insights, found that average premiums rose 113 percent from 2020 to 2021, with AON Australia expecting costs to continue to rise in 2022.
“Insurers have been grappling with understanding the threat vectors that organisations face and the control frameworks that reduce, minimise or eliminate these threats,” it continued.
Ransomware attacks involve hackers or syndicates freezing or encrypting a victim’s files until a ransom is paid, often in the millions.
AON’s report noted that while other concerns such as data or privacy breaches were still present, ransomware had outpaced these other cyberattack mediums by “leaps and bounds,” causing “havoc” across all industries and jurisdictions.
“The impacts are truly being felt by all, and compared to traditional data breaches, the financial consequences of such matters take effect immediately (typically within a 12-month period),” the report stated, saying it marked a significant shift for the cyber insurance market, which has traditionally been a “long-tail class of insurance”—complex matters generally settled over more extended periods.
Australian insurers have reacted by reducing their “line size” or coverage by 50 percent, while placing greater scrutiny on a business’s attention to cybersecurity, including their implementation of multi-factor authentication, endpoint protection software, privilege access management and network security, and disaster recovery plans.
Further, experts have warned that democratic countries could be caught in the crossfire of Russian-backed hacker groups currently targeting Ukrainian government websites and infrastructure.