• Ransomware incidents rising again as criminals use data exfiltration and supply chain attacks to maximize their leverage.
• Allianz Commercial analysis of large cyber losses shows the number of cases in which data is exfiltrated is soaring, as is the number of incidents becoming public.
• Cyber breaches that are not detected and contained early can be 1,000 times more expensive than those that are.
• Companies' cyber security priorities should include bolstering their detection and response capabilities.

SINGAPORE - Media OutReach - 25 October 2023 - Following two years of high but stable loss activity, 2023 has seen a worrying resurgence in ransomware and extortion claims as the cyber threat landscape continues to evolve, Allianz Commercial warns in a new report. Hackers are increasingly targeting IT and physical supply chains, launching mass cyber-attacks, and finding new ways to extort money from companies, large and small. Most ransomware attacks now involve the theft of personal or sensitive commercial data for the purpose of extortion, increasing the cost and complexity of incidents, as well as bringing greater potential for reputational damage. Allianz Commercial analysis of large cyber losses shows the number of cases in which data is exfiltrated is increasing every year – doubling from 40% in 2019 to almost 80% in 2022, with 2023 significantly higher. "Cyber claims frequency has picked up again this year as ransomware groups continue to evolve their tactics," says Scott Sayce, Global Head of the Cyber Center of Competence for Allianz Group. "Based on claims activity during the first half of 2023, we expect to see around a 25% increase in the number of claims annually by year-end.The attackers are back, and focused again on Western economies, with more powerful tools, enhanced processes, and attack mechanisms. Given this dynamic, a well-protected company is necessary to stand up to the threat and, increasingly, the most important element of this is developing strong detection and fast response capabilities."How is ransomware risk evolving? According to the Allianz Commercial report, Cyber security trends 2023: The latest threats and risk mitigation best practice – before, during and after a hack, the frequency of cyber claims stabilized in 2022, reflecting improved cyber security and risk management actions among insured companies. Law enforcement agencies targeting gangs, together with the Ukraine Russia conflict, also helped curtail ransomware activity. However, ransomware activity alone was up 50% year-on-year during the first half of 2023. So-called Ransomware-as-a-Service (RaaS) kits, where prices start from as little as US$40, remain a key driver in the frequency of attacks. Ransomware gangs are also carrying out more attacks faster, with the average number of days taken to execute one falling from around 60 days in 2019 to four."Double and triple extortion incidents – using a combination of encryption, data exfiltration and Distributed Denial of Service attacks – to obtain money are not new but they are now more prevalent," says Michael Daum, Global Head of Cyber Claims, Allianz Commercial. "Several factors are combining to make data exfiltration more attractive for threat actors. The scope and amount of personal information being collected is increasing, while privacy and data breach regulations are tightening globally. At the same time, the trends towards outsourcing and remote access leads to more interfaces for threat actors to exploit." Data exfiltration can significantly add to the cost of a loss or cyber claim. Such incidents can take longer to resolve, while legal and IT forensics can be extremely expensive. If data has been stolen, companies must know exactly what data has been exfiltrated and will likely have to notify customers, who could seek to claim compensation or threaten litigation. This year has also seen several large mass ransomware attacks as threat actors used exploits in software and weaknesses in IT supply chains to target multiple companies. For example, the MOVEit mass cyber-attack, which exploited a data transfer software product, impacting millions of individuals and thousands of companies, contributed to the increase in the frequency of claims in 2023 to date, affecting multiple policyholders simultaneously. "More mass cyber-attacks can be expected in the future," says Daum. "Companies and their insurers need to better understand the interconnectivity and dependencies that exist between organizations and within digital supply chains."Growing number of public cases In the past the number of cyber incidents that became public knowledge was low. Today, it is a different story, as with data exfiltration, hackers threaten to publish stolen data online. Allianz Commercial analysis of large cyber losses (€1mn+) shows that the proportion of cases becoming public increased from around 60% in 2019 to 85% in 2022...