Businesses should prepare for ransomware attacks to increase in 2022

Stuart Davey of Pinsent Masons was commenting after Pinsent Masons published its annual cyber report, which highlights the growing number of ransomware cases impacting businesses.

Ransomware is an increasingly prevalent form of cyber attack. It involves hackers installing malicious software on to computer systems to prevent organisations carrying out everyday operations or accessing data or other assets. Organisations are then prompted to make a payment to the hackers to bring about an end to the attack. 

The amount of ransom demanded by cyber criminals varies from case to case. In Pinsent Masons’ experience, ransom amounts demand commonly ranged between $30,000 and $250,000 but Davey said that the cyber team had been engaged in one case in the last year where attackers had placed a $9.5 million ransom on unlocking access to systems and data.

“The current threat of ransomware attacks is not going away any time soon,” said Davey. “Organisations will find themselves – out of nowhere – thrust into the complex world of managing a business threatening ransom attack. In all cases serious consideration needs to be given not only to the commercial and criminal risk factors in whether or not to pay a ransom and/or engage with the attacker but also, on whether or not there is a duty to report to organisations such as the ICO, other supervisory and regulatory authorities and/or the police, notify the stock market, as well as the data subjects themselves.”

“The uptick in ransomware attacks, and likelihood of their continued prevalence, serve as a stark reminder of the need for organisations to get cyber-ready and have rehearsed response and recovery plans in place for when an attack inevitably happens. Ultimately, it may well be that governments, policy makers or the insurance industry may step in with measures which go some way to breaking the cyber criminals’ business model,” Davey said.

Recent data from insurance group Marsh (20-page/4.99MB PDF) suggested the rising number of ransomware attacks is driving an increase in cyber insurance pricing. The overwhelming majority of companies renewing cyber insurance had experienced an increase in premiums in the first half of 2021, and in the first quarter, pricing rose on average by 29%.

In the Netherlands, the Dutch government is reportedly considering banning insurance companies from paying ransom payments to hackers, in a bid to take away the financial incentive for criminals engaged in ransomware and other hacking attacks. AXA announced earlier this year that it would no longer reimburse cyber insurance policyholders in France if they choose to pay ransom demands to cyber criminals.