Data from Sophos, a cyber security software company, indicates the average cost of recovery from ransomware attacks – where criminals encrypt company data and demand payment for its release – has increased by £2.15m (US$2.73m) in the past year, marking a 50% rise.
The extended recovery periods create operational challenges beyond direct costs. Companies face disruption to customer services, supplier relationships and internal processes during the remediation phase.
Insurance market response
The insurance market is struggling to keep pace with these escalating costs. Research from Sophos shows 99% of companies filing cyber insurance claims report their policies failed to cover all recovery costs. The primary reason for this shortfall is that total recovery expenses exceed policy limits.
Insurance providers are reassessing their coverage models in response to the changing risk landscape. The gap between policy limits and actual recovery costs raises questions about the sustainability of current cyber insurance products.
Organisations are responding by increasing their security budgets. Fastly’s research indicates 87% of firms plan to raise investment in security tools in the next 12 months, an increase of 11% from the previous year.
The research reveals that 50% of cyber security decision-makers express concern about their preparedness for future attacks, despite increased investment in protective measures.
