"Cyber Insurance Claim Count Led by Fund Transfer Fraud, But Ransomware Remains Most Expensive Cost"
Over the last two years, there have been significant changes in the cyber insurance landscape, much of which has been driven by ransomware. According to new research from the insurance company Corvus, ransomware remains the most expensive incident, but Fund Transfer Fraud (FTF) now accounts for more cyber insurance claims than anything else. In the third quarter of 2022, 36 percent of the company's claims were due to FTF, an all-time high that outpaced ransomware for the first time in a long time. However, ransomware cyber insurance claims continue to be the most expensive per incidence, at three times the average cost of an FTF claim. FTF has historically been one of the most common causes of cyber insurance claims, accounting for 28 percent of all claims ever submitted with Corvus and never falling below 25 percent of the overall number of claims since mid-2021. Yet, it lagged well behind ransomware amid the pandemic-induced rise in cybercrime. FTF is commonly associated with Business Email Compromise (BEC) attacks, in which scammers use spoofed or compromised email addresses, audio deepfakes, and more to impersonate a company executive and mislead a payroll employee into transferring payments from company funds. Although FTF is not as widespread or costly as ransomware, this attack type has also increased throughout the pandemic period. According to Corvus, FTF and ransomware account for more than half of all cyber insurance claims in 2022. Cyber insurance claims for ransomware are, on average, more expensive due to the damage that extends beyond the ransom payment. While ransom payments are sometimes equivalent to the sums taken in FTF incidents, ransomware leaves behind a costly repair process. The average ransomware claim is now $256,000, compared to $90,000 for an FTF claim. This article continues to discuss ransomware and FTF representing more than half of all cyber insurance claims.