The Association of British Insurers (ABI) has hit back at criticism of companies that payout fees for ransomware attacks.
The ABI defended its inclusion in first-party cyber insurance policies, according to the BBC, suggesting many companies could face financial ruin without the cover.
On Monday, the former head of the National Cyber Security Centre, Ciaran Martin said that the practice of paying out for ransomware attacks was "close to getting out of control". He also called for a change in the law on insurance, banning payments outright.
In response, a spokesman for the ABI told the BBC that insurers require that "reasonable precautions" are taken to prevent attacks in the first place, similar to other types of cover, such as home or travel insurance.
"Some might argue that any insurance that covers against a criminal act could lull the policyholder into a false sense of security," he said.
However, Martin was backed by others within the cyber security industry. Eset security specialist, Jake Moore told IT Pro that the practice was "propping up the system" and funding future ransomware attacks. In 2020, an AT&T study found that 40% of IT security professionals believed ransomware payments should be made illegal.
25/1/2021: Ransomware payouts are "propping up the system"
There is no chance of stopping ransomware attacks if insurance companies continue to keep fronting the bill, security experts have warned.
Paying hackers to get back online and to unlock files sends out the wrong message and inadvertently "props" up the system, according to Eset security specialist Jake Moore.
His comments echo those of Ciaran Martin, former head of the National Cyber Security Centre, who told The Guardian that he feared the situation was "close to getting out of control". He also called for a change in the law on insurance, banning payments outright.
Ransomware cases have increased over the last couple of years, with a spate of attacks in the UK and US as hackers took advantage of the COVID pandemic. Moore sympathised with organisations as they can often be "stuck between a rock and a hard place", left to choose between a payment to get back online or lose everything.
RELATED RESOURCE
Ransomware resiliency: The risks associated with an attack and the reward of recovery planning
An overview of the history of ransomware, its potential impact, and best practices to protect IT systems
"The cyclical ransomware business model needs to be put to a stop but there isn't a chance when insurers are propping up the system," Moore told IT Pro. "For years, insurers have offered to reimburse ransomware attack victims and even offer support in how to pay if they require help but this just sends the completely wrong message out and funds the next cyber crime wave of activity.
"If the correct legislation could be drafted, we could see a decrease in this fateful attack vector."
Along with a legal fix, Moore firmly believes that further education into preventative measure is key. Correct backups and other proactive techniques could put a stop to it and part of the problem with payouts is it doesn't guarantee that businesses systems will come back online. What's more, payment demands usually increase over time.
In June, cloud service Blackbaud suffered a ransomware attack that resulted in a data breach. The firm told its partners it had paid the ransom on the behest the stolen data would be deleted.
-
What is polymorphic malware?Explainer Polymorphic malware constantly changes its code to avoid detection, making it a top cybersecurity threat that demands advanced, behavior-based defenses
-
Outgoing Kaseya CEO teases "this is just the beginning" for the companyOpinion We spoke to Fred Voccola who remains a key figurehead at the firm as it enters its next chapter...
-
Ransomware attacks are rising — but quiet payouts could mean there's more than actually reportedNews Ransomware attacks continue to climb, but they may be even higher than official figures show as companies choose to quietly pay to make such incidents go away.
-
Cleo attack victim list grows as Hertz confirms customer data stolen – and security experts say it won't be the lastNews Hertz has confirmed it suffered a data breach as a result of the Cleo zero-day vulnerability in late 2024, with the car rental giant warning that customer data was stolen.
-
‘Phishing kits are a force multiplier': Cheap cyber crime kits can be bought on the dark web for less than $25 – and experts warn it’s lowering the barrier of entry for amateur hackersNews Research from NordVPN shows phishing kits are now widely available on the dark web and via messaging apps like Telegram, and are often selling for less than $25.
-
Healthcare systems are rife with exploits — and ransomware gangs have noticedNews Nearly nine-in-ten healthcare organizations have medical devices that are vulnerable to exploits, and ransomware groups are taking notice.
-
Alleged LockBit developer extradited to the USNews A Russian-Israeli man has been extradited to the US amid accusations of being a key LockBit ransomware developer.
-
February was the worst month on record for ransomware attacks – and one threat group had a field day
News February 2025 was the worst month on record for the number of ransomware attacks, according to new research from Bitdefender.
-
CISA issues warning over Medusa ransomware after 300 victims from critical sectors impactedNews The Medusa ransomware as a Service operation compromised twice as many organizations at the start of 2025 compared to 2024
-
Warning issued over prolific 'Ghost' ransomware groupNews The Ghost ransomware group is known to act fast and exploit vulnerabilities in public-facing appliances
