Cyber-Insurance Costs Skyrocket Amid Onslaught of Attacks
Hackers wreak havoc on American manufacturing, health care and construction sectors, according to US-Israeli startup
Cyber-insurance rates have more than doubled for many US companies in the past year amid a surge in online attacks during the COVID-19 pandemic.
At-Bay, an Israeli-American cyber-insurance startup that is headquartered in San Francisco and has offices in Tel Aviv, reported that cyber liability premiums across the United States surged by an average of 82% since the end of June 2020.
According to Roman Itskovich, co-founder and chief risk officer at At-Bay, the jump was steepest in the health care, manufacturing and infrastructure sectors. In the latter two, costs have skyrocketed by roughly 200%. As for health care, costs have gone up by 170%.
“We’ve seen 20 or 30% additional increases just in the last month,” Itskovich told The Media Line.
Cyber-insurance policies are specialty forms of cover aimed at protecting businesses and individuals in the event of a cyberattack or data breach. Traditional insurance policies are not generally designed to cover such issues and many in fact exclude any loss or damage caused by cyber-related incidents.
The construction and manufacturing sectors have long under-invested in cybersecurity, making them an attractive target for criminals, Itskovich said.
“They were not worried because attackers historically were going after financial services or retail where you could steal credit card information,” he explained. “Once this ransomware thing started to be big in late 2019 – and it really accelerated through 2020 – attackers understood that you can go after a construction firm. They don’t have any information to steal but you can still extract a lot of ransom from them.”
According to Ayelet Kutner, At-Bay’s chief technology officer, the most prevalent form of cyberattack at the moment is known as ransomware. The goal of such attacks is first and foremost extortion: Cybercriminals infiltrate a computer system and block access to critical files and data, demanding that organizations pay a ransom to restore the system to its previous condition.
“Ransomware is around 60% of all cyber insurance claims in the US,” Kutner told The Media Line.
“The majority of them are caused by open RDP ports,” she said, referring to Remote Desktop Protocol, a Microsoft-owned technology that enables remote connections to other computers.
“There are tons of vulnerabilities there; Microsoft keeps patching it but there’s always more to be found,” Kutner said.
Such incidents have become more and more common as a growing number of people around the globe work from home due to pandemic restrictions.
After ransomware, financial fraud is the second most common type of cyberattack. In these incidents, criminals trick companies or individuals into transferring funds or making payments by pretending to be someone else.
The vast majority of cyber-criminals target US businesses and the American “cyber-insurance market is probably around 90% of the global market,” Itskovich said.
In fact, US government statistics show there are over 4,000 ransomware attacks across the country on a daily basis. The average ransom fee has gone up from $5,000 in 2018 to roughly $200,000 in 2020, according to the National Security Institute.
Many of the hackers involved in ransomware attacks are linked to criminal gang activity, according to Itskovich.
“The usual suspects in attacks against the US, in general, are typically associated with Russia, China or Iran, though midmarket ransomware is mostly an east European phenomenon,” he said.
As for preventive measures, At-Bay’s CTO Kutner has several recommendations.
“The majority of attacks will start from an email so you should secure your email account by additional security measures – like using secure email gateway [software],” she said. “Multifactor authentication is also very important.”
Secure email gateway software is designed to prevent unwanted email – such as spam, phishing attacks or other malware – from reaching a person’s inbox.
Companies should also keep up-to-date offline backups of their information in the event of a breach, Kutner suggested.
“Instead of decrypting everything and paying the ransom, you just reinstall everything and if you have all of the data backed up you can be back on your feet rather quickly,” she said.