Cyber Insurance Claims Increase in Severity and Frequency

Coalition Insurance, which is pretty aggressive in refusing to insure customers unless they have better than average security practices released their mid-year update on claims.

Here is the summary:

Overall claims frequency increased by 12% in the first half of 2023, however, Coalition customers experienced 64% fewer claims compared to the broader market, with 52% of reported “events” handled at no cost to the policyholder.

Ransomware was the largest driver of the increase in claims frequency, accounting for 19% of all reported claims. Funds transfer fraud represented 31% and business email compromise comprised 26%. Other, which includes other malware, legal, errors, etc. increased slightly to 24%.

While all sizes of companies reported increased claims, the big ones, more than $100 million in revenue, reported a 20% increase in claims while those with less than $25 million reported a 7% increase. That means no one escaped and no segment reported a decrease in claims.

Overall, claims severity increased by 42%. No, that is not a typo. The average loss was $115,000. Is that number in your budget? The good news is that number is below the historical worst case average of $127,950 in 2021.

For large businesses (more than $100 million), they saw a 72% increase in claims severity. Those with less than $25 million in revenue ONLY saw a 14% increase in severity.

There is more information in the Coalition report, but the reports of breaches being a thing of the past is, apparently, according to the actual statistics, is a bit optimistic.

If you are concerned that you might not be well enough prepared, please contact us.

Credit: Coalition Insurance and CSO Magazine

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