In the first half of 2022, claims among Coalition policyholders declined, but small businesses became bigger targets and an organization’s employees continued to be the easiest for cybercriminals to infiltrate and scam.
The Coalition’s half-yearly update of the 2022 Cyber Claims Report noted that companies with revenues below $25 million saw a spike in average claims severity to $163,000 in the second half of 2021 – 85% higher than in the first half of 2021. During the first six months of 2022, severity dropped to an average of $139,000, but that’s still 58% more than values recorded in the first half of last year, the cyber insurer and the cybersecurity company.
“Organizations of this size are particularly vulnerable to threat actors because they often lack the resources to respond quickly to an attack,” Coalition said.
Phishing remains a major concern for businesses of all sizes, as employees are still the weak link in cybersecurity. The Coalition’s look at about 160,000 of the companies it protects showed that phishing was responsible for a majority — about 58% — of claims in the first half of 2022. That is an increase of 32% compared to the second half of 2021.
Phishing through corporate email compromise often leads to wire transfer fraud (FTF), where threat actors redirect or alter payment information in order to steal. Coalition said the frequency of these incidents remained consistent, but the severity increased by 3% to continue the three-year trend of rising FTF claim costs.
The good news, according to Coalition, is that the frequency and severity of ransomware claims decreased in the first six months of the year. Hackers’ ransoms also fell to $896,000, from $1.37 million for the second half of 2021.
“Organizations are increasingly aware of the threat posed by ransomware. They have begun to implement controls, such as offline data backups, that allow them to refuse to pay the ransom and restore operations in other ways,” said Chris Hendricks, head of incident response. “As ransomware is on the decline, attackers are turning to trustworthy methods. Phishing, for example, has skyrocketed – and continues to grow.”
Overall, Coalition said its policyholders had 50% fewer claims than the broader insurance market. The average loss was $175,258, down 8% compared to the second half of 2021.
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