The cyber insurer’s head of claims says ’small businesses are especially vulnerable because they often lack resources’

Smaller businesses have become bigger targets for cyber attacks with cyber insurers experiencing an increase in claims from these customers, according to the latest report by Coalition.

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The insurance provider’s mid-year update Cyber Claims Report 2022 – published today (14 September 2022) – revealed that, despite this, costs of ransomware attacks had decreased alongside overall claims costs and severity.

For example, during the first half of 2022, the average cost of a claim for a small business owner increased to $139k (£119k), which was 58% higher than during the first half of 2021.

Coalition analysed claims data from more than 160,000 organisations that it provides cyber cover for in the first half of 2022.

Catherine Lyle, Coalition’s head of claims, said: “Across industries, we continue to see high-profile attacks targeting organisations with weak or exposed infrastructure – which has become exacerbated by today’s remote working culture and companies’ dependence on third-party vendors.

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“Small businesses are especially vulnerable because they often lack resources. For these businesses, avoiding downtime and disruption is essential.”

Phishing continues to grow

Other key findings of the report included that phishing triggers now accounted for 57.9% of reported claims.

The report also noted that cyber criminal gangs had built “thriving businesses” and that funds transfer fraud (FTF) claims have held steady thanks to an increase in phishing.

Meanwhile, Coalition and the wider insurance industry observed a decrease in ransomware attack frequency and the amount of ransom demanded between the second half of 2021 and the first half of 2022.

For example, ransomware demands decreased from $1.37m (£1.18im) in H2 2021 to $896k (£772k) in H1 2022. Of the incidents that resulted in a payment, Coalition negotiated down to roughly 20% of the initial demand on average.

The severity of ransomware claims has also declined, with 45% of incidents resolved at no cost by Coalition.

  • Insurance Times has converted dollar amounts into pounds using an exchange rate of £1 = USD 1.16, which was correct as of 1 September 2022.

 

 

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