Cyber insurance claims increased in first half of 2023
The frequency and severity of cyber insurance claims both increased for businesses in 1H 2023, a new report has found.
Coalition has released its 2023 Cyber Claims Report: Mid-year Update, which details the evolution of cyber trends during the first half of 2023.
In the face of surging attacks, Coalition’s claims data showed a 12% increase in cyber claims over the first six months of the year, driven by the notable spikes in ransomware and funds transfer fraud (FTF).
The Mid-year Update found that both claims frequency and severity rose for businesses in early 2023 across all revenue bands. Companies with over $100 million in revenue saw the largest increase (20%) in the number of claims as well as more substantial losses from attacks - with a 72% increase in claims severity from 2H 2022.
“The cyber threat landscape has become more volatile, and, as a result, we’ve seen claims become more severe and more common than ever,” says Chris Hendricks, Head of Coalition Incident Response.
“To help prevent these costly and disruptive incidents, organisations need to take an active role in improving their security defenses and make risk management a top priority. Fortunately, they don’t need to do this alone: with partners like Coalition, organisations can receive support before, during, and after an incident.”
Coalition’s report also saw a resounding increase in ransomware claims frequency in 1H 2023, which grew by 27% from 2H 2022. Claims severity also reached a record high, increasing 61% from the previous half and 117% over last year. Moreover, cybercriminals increased their demands: the average ransom demand was $1.62 million, a 47% increase over the previous six months and a 74% increase over the past year.
Through Coalition’s Active Cyber Insurance, the company also recovered an unprecedented $23 million in stolen funds — all of which went directly back to policyholders. Notably, Coalition’s total FTF recovery amount was nearly three times greater than 2H 2022. The average recovery amount was $612,000 per FTF claim, representing 79% of all FTF losses in instances where recovery was possible.
Other key findings from the report include:
FTF claims frequency increased by 15% in 1H 2023, and FTF severity increased by 39% to an average loss of more than $297,000. This half, Coalition negotiated ransomware payments down to an average of 44% of the initial amount demanded.
Businesses using Google Workspace for email were markedly more secure than those using Microsoft Office 365 (M365) and on-premises Microsoft Exchange. M365 users were more than twice as likely to experience a claim compared to Google Workspace users. On-premises Microsoft Exchange users were nearly three times more likely to experience a claim than businesses using Google Workspace.
Overall, companies using Google Workspace experienced a 25% risk reduction for FTF or BEC claims and a 10% risk reduction for ransomware claims.
The report aggregates claims and incident data from the first half of 2023, including the highest-profile claim events and cyber attacks that continue to pose risks to all businesses. By performing billions of security scans across the public internet, sending thousands of critical security alerts, and investigating cyber incidents, Coalition creates a picture of the industry landscape that helps organisations understand their cyber risk better.