The demand for cyber security systems and solutions have been on the rise as a result of the emergence of complex and highly sophisticated ransomware, hacking attacks and security breaches. Although analysts agree that prevention is the optimal solution against ransomware attacks and other forms of hacking attacks, companies have begun to seek cyber security insurance as ransomware attacks began to inflict significant financial damages to organizations.
Over the past few years, various bitcoin demanding ransomware have breached into the systems of corporations and hundreds of thousands of personal computers worldwide. DeepDotWeb previously reported that investment on security firms substantially increased due to the rising demand toward cyber security and protection.
TPG partner Bryan Taylor stated:
“We have long identified the cyber-security sector, which has experienced strong growth due to the increasing volume and severity of cyber attacks, as one of the most important areas in technology. We see a compelling opportunity to invest in a highly strategic platform that is growing consistently.”
In a short period of time, ransomware evolved into smart malware that spread out massively across the globe by exploiting operating systems and unmasking public IP addresses. Ransomware encryption and penetration are no longer limited to sending fraudulent files across communication platforms such as email and social media messaging applications. Most recent WannaCry ransomware, which successfully breached into more than 100,000 computers throughout 99 countries, exploited Microsoft Windows’ SMB exploit to essentially hijack every vulnerable IP addresses on the internet.
Wow! I’ve put a SMB honeypot on the internet and I was infected by Wannacry in less than 3 minutes! pic.twitter.com/fNQxmUeW7G
— Benkow moʞuƎq (@benkow_) May 13, 2017
On May 13, Russian publication RT reported that computers at Russia’s Interior Ministry and the country’s largest telecommunications company Megafon were also affected by the WannaCry ransomware.
“The very virus that is spreading worldwide and demanding $300 to be dealt with has been found on a large number of our computers in the second half of the day today,” a Megafone spokesperson said.
Because of the rapid development and evolution of ransomware, insurance provider Munich Re predict insurance premiums to rise to $10 billion by 2020 and record a 3x growth in a 3-year period. Currently, cyber insurance premiums are valued at $3.4 billion. But, in consideration the explosive growth of malware and ransomware, analysts at Munich Re noted that the cybersecurity insurance market will expand proportionally to the attacks.
Even existing insurance giants including Allianz are observing a massive potential in the cyber security market. Hartmut Mai, the chief underwriting officer for corporate lines at Allianz’s industrial insurance arm, said in an interview with Bloomberg that cyber insurance is a key component of the company’s growth.
“We are optimistic that it can develop into Allianz’s and the industry’s next blockbuster. Cyber insurance is our key growth area at the moment,” said Mai.
Prior to the release of the WannaCry ransomware, Beazley head of cyber insurance Paul Bantick explained that no big breaches have occurred since 2015. However, with the recent international WannaCry scandal, corporations will become increasingly aware of ransomware attacks and are likely to allocate a large amount of resources in the development of cyber security systems and cyber insurance.
“Cyber risk has become a boardroom issue over the past years, following some high profile hacker attacks. We haven’t seen the big breaches at the retailers such as in 2015 or the large health-care breaches that occurred in 2016. Yet, there’s still a high frequency of smaller losses,” said Bantick.
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