Cyber insurance carrier, Coalition (who is starting to write D & O coverage as well), released its 2022 cyber claims report yesterday. One of the interesting points of data included in the report was that funds transfer fraud (FTF) losses increased dramatically from the previous year along with the frequency of such losses.
Small businesses in particular suffered significant increases in FTF losses. This may not be surprising to those in the insurance industry that have been trying to persuade smaller businesses to purchase cyber insurance, but the statistics illustrate the stark reality of going without cyber insurance. Small businesses (less than $25 million in revenue) saw initial FTF losses increase by 102% in the second half of 2021, according to Coalition. These businesses also saw a spike in FTF frequency during the period, growing 54% compared with 2021’s first half. Overall, small businesses saw a 54% increase in FTF during 2021 (and a 40% increase in ransomware attacks) according to the report.
One thing to keep in mind is that FTF is not a standard coverage on cyber (or crime) policies, but the need for such coverage has never been more apparent. When exploring cyber and/or crime coverage, assuring FTF coverage is included in the quotes is vital.