Re:Insurers run from ransomware cover as losses mount
by TheCoelacanth on Saturday November 20, 2021 @01:14PM
(#29290419)
Insurance to pay off the gangs makes things worse, but insurance to pay for the damage caused by refusing to pay wouldn't.
Re:Insurers run from ransomware cover as losses mount
by toss1 on Saturday November 20, 2021 @01:43PM
(#29290687)
Yes, good point.
Although paying only for recovery requires a lot of access to internal accounting information to ensure that the victim is actually paying for recovery and not paying off the gangs in secret. And there's a pretty strong motive for the victim to do this.
While I find insurers are far too often in the category of scammers (e.g., see recision of fully paid health insurance policies on bogus criteria after an insured person gets an expensive disease), I don't envy them here. I don't see how an insurer is to make a product profitable (i.e., worth selling) when they are specifically & systematically targeted by these gangs.
The counter to this is the behavior of the ransomware gangs - they increase their demand to the available insurance. So, when everyone has insurance, everyone is a target, and promptly pays out to the max insurable level (higher payouts get to be too much trouble for the ransomers). As this scales up, either the insurance company goes bankrupt, or the premium goes up to the same as the payout.
Insurance is not the fix and arguably makes it a lot worse, as this provides a stream of funds to aid the ransomware gangs win the arms race. I'm not usually enthusiastic about law enforcement first policies, but it does seem from a game theory perspective that it'd be more effective to outlaw ransomware payments to choke funds from the criminals, and aggressively hunt them. Possibly fines doubling the ransom paid would help fund the fight on the enforcement side?