Why Ransomware is the most common cyber threat Canadians face today | 2022 Cybercrime Threats

The sophistication of threat actors and business’s reliance on technology is creating a perfect storm for companies’ vulnerability for cyber breaches. Cyber-crime is changing daily and has gone from a hacker’s right to brag, to cultivated businesses extorting hundreds of millions of dollars. It is not just big companies, cyber criminals are targeting, it is widespread across many industries and sizes of companies via automated programs to seek out vulnerabilities in online systems.

Why the increase in the threat of cybercrime?

• Companies’ reliance on technology – widespread technology risk
• Increased remote work and use of new technologies to facilitate remote access and collaboration
• Overall sophisticated of threat actors
• Automation of cybercrime and immediate monetization via funds transfer fraud and ransomware. This allows threat actors to attack hundreds of vulnerable companies at once.
• Threat actors are becoming confident that their approach works.
• The offensive threats out weight the defence strategies.

What is ransomware?

The broad definition of ransomware is:
1. It is a type of malware
2. Designed to encrypt files
3. A way to contact the attacker

The early days of ransomware was very unsophisticated, conducted by amateurs, hackers asked for cash transactions, and the ransom demands were quite low.

The expeditious escalation of ransom demands equates to the sophisticated evolution of cybercrime. In 2016 ransom demands were typically a few thousand dollars and primary delivered by phishing. Now we are as seeing ransomware as a service. Attackers are becoming more aggressive and are collaborating among each other. The current state of ransomware is very destructive to business operations. Extortion demands can be in the millions, and Coalition has seen demands as high as $40m. But this is just the tip of the financial implications. Add on the cost of loss of business, the cost of loss of reputation, recovery fees, lawyers and notification costs.

Rapid increase in sophistication and threat of cybercrime

According to the 2022 Cyber Claims Report conducted by Coalition:

• Increase in attacks on small businesses is up 40%
• An increase in average ransom demand to an average of $1.8 million per claim
• Cases of funds transfer fraud is up 18%.
• Recent research shows that ransomware gangs prefer victims located in Canada, US, Australia, and Europe.
• Cyber criminals not only encrypt the data, they threaten data theft to sell on the dark web.

Why data back-ups are not the only solution

A lot of organizations tend to not have 100% back up coverage or infrequency of data backups. Another vulnerable is to the lack of experience in how to restore the data. If it takes a company two weeks to come back online, that can be catastrophic for operations and revenue generation.

It is increasingly important to have multiple levels of backups. It is best to have both cloud and onsite backups that cover frequency and all data points.

In addition to back-ups, it is critically important for companies to take preventative steps to secure data at all times.

Changing roles of insurers Insurance companies moving to a pre-breach mentality

Because of the increase in the frequency and severity of ransomware, there is reduced capacity for coverages and increase in premiums. Many insurers are now moving to a preventative model. We recommend for all Reliance corporate clients to get a free assessment of your security system using Coalition’s state of the art security scan to spot and prevent digital risk before it occurs. And we will include recommendations on how to improve your cyber security.

The effects of Covid increased the severity of ransomeware attacks from Q1 to Q2 2020 by 47%

Resources for: The Threat of Cybercrime:

https://reliance.ca/2021/10/26/implementing-secure-password-protocols-and-behaviours-in-your-company/
https://reliance.ca/2020/10/01/cyber-threat-2020/

https://reliance.ca/commercial-insurance/liability-insurance/cyber-insurance/