According to findings by Sophos Group, the increasing rate of ransomware has enhanced the adoption of cyber insurance to limit exposure of companies to infringement of data protection and privacy law.

The Britain based Information Technology Security Company, in its report tagged, ‘The State of Ransomware 2022,’ noted that ransomware has become more prevalent, making most companies understand that insurance providers are better at guiding victims swiftly and effectively through the incident response process, reducing the remediation cost.

According to the report, huge sums of money has been paid in ransom to cybercriminals by businesses, thereby making cyber insurance a necessity for organisations that lack the resources to cover cyber security breaches.

The IT company explained that most organisations are choosing to reduce the financial risk associated with an attack by taking cyber insurance, as they believe that insurers pay some costs in almost all claims.

The report also showed that cyber insurance adoption increases with organisation size, with 88 percent of 3,001 to 5,000 employee organisations having cover compared to 73 per cent of those with 100-250 employees. It further noted that organisations hit by ransomware in last year are much more likely to have cyber insurance than those that avoided falling victim to an attack.

“Among those that were hit, 89 per cent have cyber insurance compared with 70 per cent of those not hit. The cause and effect is not clear here. It may be that direct experience of a ransomware incident has driven many organisations to take insurance to help mitigate the impact of future attacks.”
Sophos Group

The report also explained that adversaries may target their attacks on organisations that they know have insurance cover to increase their chances of a ransom pay out.

Another option, it pointed out, is that some organisations took cover to balance known weaknesses in their defences, while the reality could be a combination of all the aforementioned factors.

Global Risk Reports

Global risk reports have also shown that ransomware is one of the most disruptive cyber attacks on the global risk landscape and has resulted in heavy revenue losses, operational disruptions, loss of trust and reputations, drop in share prices, loss of investment opportunities, litigations, fines and sanctions, and a decline in business revenue for many companies.

Thus, the increasing cost of cybersecurity has made a growing need for cyber insurance to limit exposure and liabilities of a company.

Christine Marciano, president, Cyber Data Risk Managers, rightly noted that, “the cyber threats of today are the insurance claims of tomorrow“.

Marciano noted that beyond compliance obligations, organisations are considering insurance as part of their risk management strategies.

Meanwhile, Ghana has one of the highest rates of cybercrime in the world, ranking 7th in a 2008 Internet Crime Survey. The most popular form of cybercrime in Ghana is cyberfraud and is typically achieved via credit card fraud.

However, recent decreases in universal credit card usage has seen the expansion of other cybercrimes such as blackmail and hacking. This growth in crime has warranted a government response, with policies specifically addressing the cyberspace being developed.