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Marsh’s North American clients suffer cyber extortion surge

Cyber extortion demands and payments are on the rise, according to an analysis of more than 1800 cyber claims to Marsh in the US and Canada last year.

Some 282 Marsh clients reported cyber extortion last year, the highest annual total and up from 172 in 2022, the broker says.  

The median extortion payment increased to $6.5 million and the median demand to $20 million as criminals grew bolder. The previous year, the figures were $335,000 and $1.4 million.

However, the proportion of companies paying ransoms declined to 23% from 30% in 2022. The percentage was at 60% or more in 2019, 2020 and 2021.

Healthcare, communications, retail/wholesale, financial institutions and education remained the five most affected sectors.

Marsh says 21% of clients that bought a cyber policy reported an event last year, and ransomware prompted less than 20% of claims.  

It says clients that use their insurers’ pre-approved vendors can shorten the average time from event notification to first payment to just over two months, compared with more than a year when using non-panel vendors.

Marsh says the record of 1800-plus claims was partly driven by the increasing number of clients buying cyber cover. Figures include claims under cyber, tech and telecom errors and omissions, and media coverage policies.

Breach response costs average $US1 million ($1.5 million), covering privacy counsel, computer forensics and notifications.

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