The number of claims made against cyber insurance policies has fallen by over a third in the past two years, despite a rise in the number of policies being taken out.
Claims have fallen from 58% in 2022 to 36% in 2024, despite the take up in cover rising from 51% in 2022 to 66% in 2024, according to the latest Data Health Check from Databarracks.
The annual survey of 500 UK IT decision makers suggests that an increasing number of ransomware recoveries may be behind the numbers. In previous years, the majority of organisations chose to pay out in the event of an attack, the firm said. The amount organisations are claiming has also decreased, with claims of over £1m decreasing from 48% to just 16% in 2024.
James Watts, managing director at Databarracks, commented: “We have long speculated about the negative effect of cyber insurance policies on ransomware. Organisations were incentivised to pay ransoms instead of refusing, leading to a vicious cycle of payments. The nascent cyber insurance market suddenly became unsustainable.
“But then things changed. As our Data Health Check found last year, cyber insurance prices increased significantly and the requirements to obtain cover became stricter. The result was that the bar of preparedness was raised.”
This is the influence Databarracks hopes insurance can have on the cyber landscape, Watts added.
“Legislating and banning all payments is problematic for a number of reasons, so one of the few factors that could disrupt the growth of ransomware is this shift in the industry,” he said.
Source: cirmagazine.com
