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Vol. 8 - Issue 8
September 25, 2019


Insurers Criticized For, Get Ready . . . Paying Claims


Stories in the media, criticizing insurers for not paying claims, are about as dog bites man as they get.  But what about a story criticizing insurers for paying claims.  Now those you don’t see too often.  That’s more like dog helps man fix the paper jam in the copier.

But this is just what was published in late-August by ProPublica, which describes itself as a non-profit newsroom that investigates abuses of power.  In “The Extortion Economy: How Insurance Companies Are Fueling a Rise in Ransomware Attacks,” author Renee Dudley provides a lengthy discussion of ransomware and the role of insurers, under cyber policies, paying ransom to get their insureds’ crippled systems back up and running.

The author’s conclusion: Insurance companies are responsible for the proliferation of ransomware.  And, what’s more, they are doing so because it’s good for business.  The ProPublica article is very long.  Its thesis is this:     

“The FBI and security researchers say paying ransoms contributes to the profitability and spread of cybercrime and in some cases may ultimately be funding terrorist regimes.  But for insurers, it makes financial sense, industry insiders said. It holds down claim costs by avoiding expenses such as covering lost revenue from snarled services and ongoing fees for consultants aiding in data recovery.  And, by rewarding hackers, it encourages more ransomware attacks, which in turn frighten more businesses and government agencies into buying policies.”

Check out the ProPublica article here 



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