INSURANCE I.Q

CYBER UPDATE

Ransomware Largest Driver of Cyber Insurance Claims in the Last Five Years

Ransomware represented the number one cause of loss in a study of almost 6,000 cyber insurance claims, with the average ransom rising to $247,000 and the average incident cost up to $352,000 in 2020.

NetDiligence’s 11th annual cyber claims study evaluated 5,797 claims arising from incidents between 2016 and 2020. Across the five years of claims data, ransomware accounted for 32 percent of all incidents affecting small to medium enterprises (SMEs). Hacking incidents were a distant second at 10 percent, and business email compromise followed at nine percent.

The study revealed that ransomware events accounted for 79 percent of claims with a business interruption (BI) expense, with an average BI cost of $446,000 in 2020 and an average BI cost of $316,000 over the five-year period. Ransomware events also caused 81 percent of claims involving recovery expense losses, according to the data.

Professional services firms were found to have the highest frequency loss over the last five years, followed by manufacturing, health care, technology, retail and financial services. The top five sectors account for 70 percent of claims and 74 percent of total incident costs. Professional services firms also contributed 32 percent ($229 million) of overall incident costs; this number is well above health care, which was 11 percent.

Claims costs range from less than $1,000 to over $120 million. Nearly all (99 percent) came from SMEs (small to medium sized enterprises) for a total of $537 million in losses, and the losses associated with the one percent of claims striking large businesses reached $727 million.

The averages include “some very expensive claims,” the authors of the report noted. For SMEs, six claims in the sample reached over $5 million, with one costing over $100 million. For larger companies, 10 claims featured costs between $15 million and $100 million. NetDiligence said it found no link between business size and the magnitude of a cyber loss, with the largest event affecting an SME.

“With ransomware again the number one cause of loss, we will be watching closely to see whether cyber policyholders, especially SMEs, deploy sufficient cybersecurity safeguards to reduce their ransomware exposure and qualify for ransomware coverage. If not, the challenge will be how we, as an industry, can help them get there,” said Mark Greisiger, NetDiligence president, in a statement.

For more risk management and insurance guidance, contact Brad Schmid at bschmid@cbiz.com or (763) 5492247.

LOCAL NEWS

continued from pg. 8 3rd Place - Madison Schuler, Dakota County Technical College, Rosemount

High School Division

1st Place – Jacob Kragero, Moorhead Senior High School 2nd Place – Carter Norman, Moorhead Senior High School 3rd Place – Jon Thayer, St. Cloud Community & Technical College

Collision Repair College Division

1st Place – Brad Bakker, Ridgewater College, Willmar 2nd Place – Tanner Friesen, Ridgewater College, Willmar 3rd Place – Jose Nunez, Minnesota State CollegeSoutheast Technical, Winona

No High School Division

Congratulations to all!

Minnesota Careers in Auto Repair & Service (MNCARS)

No High School Division

Refinishing College Division

1st Place – Brad Bakker, Ridgewater College, Willmar 2nd Place – Cole Poncelet, Dakota County Technical College, Rosemount 3rd Place – Noah Scherping, St. Cloud Community & Technical College

MNCARS is a non-profit organization established in 2016 by AASP-MN. Its sole purpose is to promote careers in the automotive industry, recruit young people into the state’s college-level automotive service and collision repair programs and, ultimately, into industry workplaces. To further those efforts, MNCARS recently participated in the following event:

• Bemidji High School Career Fair April 11

Thank you Scott Merschman (Kenny's Clark and Goodyear) for your participation

Take advantage of the resources in the MotorMouth toolbox at carcareers.org/ motor-mouth/. Get out and get active in your local community promoting industry careers!