Paying ransom following a cybersecurity attack can have detrimental effect on efforts to fight ransomware attacks and its proliferation. Insurance companies are NOT at the root cause of these attacks, but they are certainly at the ROOT of the solution. Here are some of the current key challenges:
- Encouraging more attacks: Paying ransoms may incentivize cyber criminals to target insured companies more frequently, as they know that there is a possibility of a payout.
- Lack of guarantee: There is no guarantee that paying the ransom will actually result in the release of the encrypted data. In some cases, the attackers may simply take the payment and not provide the decryption key, or what is often the case, they may demand additional payments.
- Reputation damage: Insurance companies that pay ransoms in response to ransomware attacks risk damaging their client’s reputation, as they are effectively contributing to the a system failure.
Given these challenges, some insurance companies may be changing their policy coverage to reflect the growing threat of cyber attacks. For example, they may be placing greater emphasis on helping clients to strengthen their cybersecurity measures to prevent attacks in the first place, rather than simply responding to them after they have occurred. Additionally, they may be working with law enforcement agencies to track down and prosecute cyber criminals, in order to reduce the overall threat.
Ultimately, the approach taken by insurance companies to ransomware attacks will depend on a variety of factors, including the size and nature of the attack, the value of the data that has been encrypted, and the ability of the company to recover the data through alternative means. However, it is clear that the traditional approach of simply paying the ransom is not sustainable in the long-term, and that a more comprehensive approach is needed to address the growing threat of cyber attacks.
Cybercrimes and ransomware
Insurance companies can use a variety of methods to encourage policy beneficiaries to take steps to combat cybercrime, but it is important to note that they cannot force policyholders to take specific actions. Here are some ways insurance companies can incentivize clients to improve their cybersecurity:
- Risk assessment: Insurance companies can offer policyholders a risk assessment to determine their current level of vulnerability to cyber threats. Based on the results of the assessment, the insurance company can provide recommendations for how to improve security and reduce the risk of a cyber attack.
- Cybersecurity education: Insurance companies can educate policyholders on the latest cybersecurity best practices, including how to avoid phishing scams, how to secure their networks, and how to protect sensitive data.
- Discounts for cybersecurity measures: Insurance companies can offer discounts to policyholders who take steps to improve their cybersecurity, such as implementing two-factor authentication or using encryption to protect sensitive data.
- Exclusions for non-compliance: Insurance companies can exclude coverage for certain types of cyber threats if the policyholder has not taken adequate steps to secure their systems. This can serve as a financial incentive for policyholders to take cybersecurity more seriously.
It’s important to note that these methods should be implemented in a way that is fair and equitable for all policyholders. Insurance companies must also be transparent about their expectations and the consequences of non-compliance. Ultimately, the goal is to encourage policyholders to take responsibility for their own cybersecurity and to work together with insurance companies to reduce the overall threat of cybercrime.
There are many reputable cybersecurity consulting firms and companies that provide cybersecurity risk assessments. Here are a few of these firms:
- Accenture
- PwC
- EY
- KPMG
- IBM Security
- Deloitte
- NCC Group
- Booz Allen Hamilton
- Protiviti
- Crowe
It’s important to note that the best cybersecurity consulting firm for your specific needs may vary depending on the size and industry of your organization, as well as your budget and other requirements. It’s a good idea to research and compare multiple firms before selecting one to work with.
Editor view: History showed that when insurance companies pay indemnity for ransom, highjacking or any other form of criminal activities, the crime will perpetuate. The example of Italian mafia taking hostages for ransoms, or Somalia pirates highjacking commercial freighters is just an example of crimes that were mitigated by stopping payments of ransoms by insurance companies. In the case of Italian mafia, the government made it illegal to pay for kidnaping, and insurance companies voluntarily stopped paying for freight ships highjacking by pirates. If sources of payments is cutoff, criminals will move on and pursue other avenues.
I wouldn’t point the finger at insurance companies for the proliferation of cyber-ransomware and be the root cause of these type of attacks, BUT, insurance companies make the process for criminal easier and facilitate access to a constant flow of financial rewards (ransom payments).
Insurance companies can easily demonstrate negligence of the policy holders by hiring experts in the cybersecurity and IT field. Policy holders on the other hand, can easily prevent being victim of cybercrimes or insurance policy breach by hiring security experts.
