Cyber Insurers May Want To Rethink Ransom Payments Based On This New Data

May 23, 2023 – Published on CRN

Ransom payments have long been controversial on the grounds that they enrich and embolden cybercriminals. But recent findings suggest that the payments may not make sense for cyber insurers from a financial standpoint.

At GuidePoint Security, the incident response team has seen that a variety of factors goes into a victim organization’s calculus about whether to pay a ransom, said Mark Lance, vice president for digital forensics and incident response and threat intelligence at the Herndon, Va.-based cybersecurity specialist.

“There’s so many potential reasons or justifications for certain clients on why they might need to consider that payment,” Lance said. “I could see it go in either direction where it costs more if you pay [the ransom], or costs less if you pay it.”

For instance, in one case of a hospital that was hit by ransomware, the hospital was losing millions of dollars a day, and paying the ransom seemed to be a faster way to get systems online than restoring from backups, which would have taken weeks, he said.

“They paid the ransom because they were able to get the decryption keys and initiate the decryption quicker than waiting for their offline backups to be able to recover and restore from,” Lance said. As a result, “it ended up saving them money.”

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