Surge in Ransomware Insurance Claims with Rising Price of Bitcoin

    Chubb Ltd. a well-known insurance provider that mainly caters to affluent customers, is among the many insurers facing a rise in costs connected to claims from ransomware attacks. According to Chubb, this rise is largely because of the surging price of Bitcoin.

    BankBazaar Singapore – January 4, 2018

    Singapore: As per Chubb’s Executive Vice President Michael Tanenbaum, the rise in price of Bitcoin has a direct link to the growth in ransomware attacks. In mid-2017, top insurance payouts in commercial ransomware attacks exceeded USD1 million, rising sharply from the previous high of close to USD17,000.

    Insurance providers are an ideal place to search for information on costs from ransomware. Worldwide, security firms have reported a sharp rise in incidents, ranging from mass assaults to precision hacks. Most insurers take the help of third-party experts, to enable cryptocurrency payments and probe the culprits.

    The rage for Bitcoin has grown tremendously as hackers now are demanding larger payouts – the number are going up to six figures. Third-party experts negotiate with hackers or make sure that clients do not have to deal with terrorist groups.

    According to Christiaan Beek, from McAfee Inc., some hackers have been slow to respond to Bitcoin-denominated demands. A network of hackers who may seek only a few Bitcoins per victim initially may keep amassing that sum for months. Even then, 2017 saw the cryptocurrency climb upward, from USD1,000 in January to exceed USD19,000 in December.

    Ransomware claims at Beazley Plc has already grown more than 70% in 2017. The situation is quite similar in other companies like McAfee. On the other hand, Symantec estimates average ransom demands to drop.

    Ransom insurance began as a niche in the seventies, established by firms like Lloyd’s of London Ltd. and AIG. Over time, some insurers added security for online extortion and started rolling out distinct products to tackle cyber-attacks. Today, ransomware is making its presence felt as law firms are posting memo to clients, cautioning them to review terms and conditions in their contracts.

    According to Anthony Dagostino, from Willis Towers Watson, there often was no deductible for online extortion schemes within general kidnapping policies. However, that is changing now.

    Insurers offering cyber insurance in Singapore include AIG and AXA.

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