A New Approach To Cyber Security Helps Resist Extortion
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Specialist insurance firm Resilience has launched the first edition of its annual Claims Report, illuminating how a new approach to cyber risk is helping to reverse the trend in ransomware attacks.
At the same time as attacks skyrocketed in late 2022 and early 2023, the Claims Report reveals that nearly 80% of organisations hit by ransomware recovered data and systems without paying a ransom, a marked improvement from current industry standards.
The cost of cyber crime is expected to reach $10.5 Trillion by 2025, outpacing investment in security and insurance by more than a factor of five. With only 65% of organisations stating that they plan to increase security spending this year, a new approach to improve cyber resiliency is needed.
The findings of this analysis shed light on effective strategies to build cyber resilience. In particular, Resilience’s report reveals that by balancing risk acceptance, mitigation, and transfer, organisations are able to significantly strengthen their ability to recover data and maintain business operations in the face of ransomware attacks, without making an extortion payment.
“We founded Resilience because we believed that the current approach to defending the digital ecosystem was inadequate,” said Vishaal Hariprasad, co-founder and CEO of Resilience. “By bringing together risk, finance, and security roles which previously operated in silos, we can deliver a completely new approach: Cyber Resilience. Our clients’ success in mitigating the threat of ransomware validates this approach and spotlights the opportunity for the digital economy to rethink how they approach risk.”
Key Findings
The Claims Report examines the full year 2022 through the first quarter of 2023 and key finding include:
- Ransomware notices grew by 33% into Q3 2022 and then doubled in Q4 2022. This rapid growth held consistent in Q1 2023.
- Among all primary claim notices, phishing is the lead point of failure (23.4% of all claims). Risk from third-party vendors is a close second at 22.1% of all claims.
- Ransomware (17.8%) was the leading cause of loss for claims. Transfer fraud (17%) vendor data breaches (11.8%), and business email compromise (10.4%) followed.
- 100% of Resilience Solution clients were able to avoid making an extortion payment in 2022
- Resilience clients were half as likely to pay a ransomware extortion, compared to industry averages.
- In one example, an educational institution began working with Resilience following two previous breaches to improve its security posture and qualify for better insurance coverage.
Resilience partnered with this educational organisation to implement specific security controls and develop an incident response to mitigate future threats. When the organisation experienced a phishing incident one month later, the issue was resolved within days.
Despite starting with substandard security controls, Resilience was able to work with this client to restore its reputation and shore up its defences against cyber attacks.
“The cyber insurance model is broken,” said Mario Vitale, President of Resilience. “It’s stuck in analog, while the digital world is rapidly changing. We’re doing for cybersecurity what insurance companies did for property, auto, and healthcare: pair technology and finance to shape behaviour and drive better outcomes. The results are impressive, and we’re just getting started.”
The findings of Resilience’s 2022 Claims Report support their model of a holistic approach to managing risk. The company recently introduced the Resilience Solution, which builds on this model to empower organisations with a significantly easier and more effective platform for cyber risk quantification, assessment, control, and financing.
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