A global underwriting firm has revealed that cyber insurance claims are soaring, and it is now receiving claims at a rate of more than one per day.
CFC Underwriting, which provides insurance to over 60 countries including Canada, handled more than 400 cyber-related claims in 2016 – up 78% from 2015, it said.
Small businesses are a big target, according to the statistics, which show that 90% of claims by volume are from businesses with less than $83 million in revenue.
Graeme Newman, chief innovation officer at CFC, told
BBC News that attackers are targeting “low hanging fruit.”
Privacy breach was the most frequent cause for claims, followed by financial loss.
Ransomware attacks – in which victims are forced to pay hackers who have encrypted their data in order to unlock it – were the third most common type of claim at 16%.
As a result of the rising number of cyber events, and the complexities involved, insurance is having to respond accordingly.
“It’s now become more of an incident response service that pays all the costs associated with that,” Newman said.
Some insurers have third-parties such as security, data forensics and PR firms on call to help respond when a claim is filed, he said.
Some also employ negotiation experts to help deal with ransom and extortion demands, he added.
“You ring up the insurer and they get people in to help.”
With firms facing attacks on a daily basis, cyber insurance is becoming a necessity, he said.
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