Cyber insurance and ransomware payouts “paper over cracks” in cybersecurity confidence

More than nine out of 10 UK firms say the cyber threat has increased with 72 percent being willing to pay a ransom and use insurance to help recovery.

Posted 26 July 2023 by Christine Horton

Cyber threats are increasing, capabilities aren’t keeping pace and ransom payouts and insurance cover the gaps, these are the findings from new research commissioned by data security and management firm, Cohesity.

As part of a global survey of over 3,400 IT and security decision makers, 91 percent of those surveyed in the UK believe that the threat of ransomware attack has increased over the past year. Thirty-nine percent of respondent’s organisations had been a victim to it in the last six months. 

Cyber resiliency plans aren’t keeping pace with rising threats. While more than 85 percent of respondents’ organisations have a cyber resiliency strategy in place, only one in five (23 percent) have complete confidence in it. Over half (53 percent) say that it has gaps, could be improved or they have little confidence in it. Forty-two percent say their teams are stretched too thin, while more than a third of respondents (38 percent) say their organisation’s leadership is simply not aware of the importance of cyber resiliency, perhaps explaining why organisations are still failing to invest sufficiently in skilled people and solutions. In fact, 70 percent of respondents believe that they currently lack enough skilled workers to respond effectively to a data breach or loss.

“A cyber resiliency strategy that prioritises the ability to recover from a cyber-attack is arguably more important than one that focuses solely on prevention,” said James Blake, CISO EMEA at Cohesity. “But all the time that companies try to pay their way out of trouble with ransoms, insurance or warranties is throwing money in the wrong direction as this won’t help them recover the data and processes that keep the organisation in business. The gaps aren’t in prevention or even in the workforce, the gaps that need bridging are in the c-suite taking the threats seriously and investing in tools to rapidly recover from attacks.”

Despite these concerns, 95 percent are confident they can recover data and critical business processes in the event of a data breach or loss, although 68 percent said it will be touch and go or they have limited confidence. About a third (37 percent) cited a lack of coordination between IT and security teams as the biggest barrier to getting the organisation back up and running, a similar number (31 percent) said that lack of a recent clean and immutable copy of data would be their biggest hurdle. Fifty-two percent of respondents believe they would recover data and business processes in under a week (1-6 days) and a leading three percent believe they could do it in less than 24 hours. 

Ransoms and insurance payouts

However, it appears from the research that organisations are prepared to pay to compensate for some of the gaps in their cyber resiliency. Of those surveyed, only nine percent ruled out paying a ransom to recover their data after an attack. Twenty-nine percent would definitely pay and 62 percent would consider it depending on the severity of the attack and cost of ransom. Likewise, 80 percent believe that they would be covered by ransomware warranties, contrary to Cohesity’s own investigation of the terms and conditions of many warranties. Similarly, 73 percent of those surveyed said their organisation has cyber insurance, but reflecting the industry challenges, almost half (48 percent) said it was harder to get insurance now than three years ago.

“IT and SecOps must co-own organisations’ cyber resilience outcomes to identify sensitive data and protect, detect, respond, and recover from cyberattacks,” said Brian Spanswick, CISO, Cohesity.

“Relying on traditional backup and recovery systems, which lack modern data security capabilities, in today’s sophisticated cyber threat landscape is a recipe for disaster. Instead, organisations should seek out data security and management platforms that integrate with their existing cybersecurity solutions and provide visibility into their security posture and improve cyber resilience.”