A small minority of businesses agreed to pay up as ransomware demands surged last year, according to the latest Cyber Claims Report from US insurer Coalition. 

Claims severity fell 19% to an average loss of $US116,000 ($166,000), even as frequency rose 3%.

About 64% of closed claims at Coalition were resolved with no out-of-pocket loss for the policyholder last year.

Coalition’s global head of claims Rob Jones says the insurer’s “active insurance” approach is “reshaping the loss profile of cyber insurance and creating better outcomes.

“While threat actors escalate their demands to push for higher seven-figure payouts, cyber insurer support is helping businesses limit losses and is starting to help tip the scales back in favour of defenders.

“While attackers are knocking on the door more often, businesses are becoming more effective at limiting the damage if a breach occurs.”

Coalition says a record 86% of businesses refused to pay ransoms last year, suggesting better cyber resilience via data back-ups and incident response plans.

At the same time, initial ransom demands surged 47%.

Ransomware was the most costly type of claim, with an average loss of $US269,000 ($385,000). Business email compromise and funds transfer fraud again accounted for most cyber incidents.

“While we’re encouraged to see more organisations willing to walk away from extortion demands, our claims data shows that old-fashioned email-based crime hasn’t gone anywhere,” Mr Jones said.  

The report is based on Coalition’s more than 100,000 policyholders in Australia, the US, UK, Canada and Germany. Read it here.