While ransomware attacks are more prevalent than ever and cyber criminals have grown bolder in their demands, an increasing number of companies are refusing to pay ransom demand, according to a report from insurance firm Marsh.
► Median ransom demand soared to $20 million in 2023
► Less than one in four firms paid out
According to the report, which looked at more than 1800 experiences of companies in the US and Canada, the cyber extortion attempts hit record numbers in 2023. Overall, 21% of Marsh’s clients reported a cyber event in 2023, a vast majority of which were privacy claims and system attacks leading to unauthorised access and potentially exposed data. This has remained fairly consistent over the last five years — between 16% and 21% — demonstrating in part that companies’ cyber controls have kept pace with the growing sophistication and frequency of cyberattacks, said the firm.
In 2023, however, a record 282 extortion events were reported to Marsh, a 64% increase from 2022. Although representing only 17% of all cyber claims filed, ransomware remains a top concern for organisations given their increased frequency, sophistication, and potential severity. Indeed, the median ransom demand soared to $20 million in 2023 from $1.4 million, while the median payment made was $6.5 million, reflecting the effectiveness of extortion negotiations, Marsh notes in the report.
Only 23% of Marsh’s clients impacted by a cyber extortion event in 2023, paid the ransom. A majority — 77% — refused, reflecting a growing trend. In 2021, only 37% of Marsh’s clients rejected cyber criminals’ demands.
‘With the ever-increasing threat of ransomware and its far-reaching impact on diverse industries, it is imperative for clients to adopt a proactive stance in safeguarding themselves’, said Meredith Schnur, cyber practice leader at Marsh, US and Canada. ‘To enhance their cyber resilience, organizations should proactively fortify defences, implement robust security measures, and consider cyber risk across the enterprise, including potential economic and operational impacts, as well as cybersecurity at vendors and third parties.’
Marsh is a leading insurance broker and risk advisor and a business of Marsh McLennan. The report – Ransomware: A persistent challenge in cyber insurance claims – analysed more than 1800 cyber claims submitted to Marsh in the US and Canada in 2023.
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