Ransomware-related losses have skyrocketed in the first half of this year, increasing by 68%, according to the latest study by insurance provider Coalition.

The findings, published as part of Coalition’s 2024 Cyber Claims Report: Mid-year Update, found an average ransom of $353,000 (£271,518). While average ransom demands rose by 1% in the first half of 2024, reaching $1.3 million (£999,900), the demands linked to two specific ransomware variants, Play and BlackSuit, were much higher, averaging $4.3 million (£3,307,399) and $2.5 million (£1,922,906) respectively.

According to the report, 40% of policyholders that experienced a ransomware event opted to pay the ransom, however these payments were generally negotiated down by an average of 57%.

While overall insurance claims frequency decreased by 4% over H1 2024, the severity of claims increased by 14% to an average insurance loss of $122,000 (£93,832), largely driven by threat actors targeting larger businesses in order to reap bigger payouts. 

As well as demanding ever bigger ransoms from a smaller pool of victims, the report also found attackers’ tactics to gain control are shifting. The data shows a 2% decrease in the use of fund transfer fraud, a cyber-attack that causes a victim’s funds to be sent to the attacker’s account instead of to the proper recipient, as well as a 15% fall in the severity of these types of attacks.

In what could signal the beginning of a worrying trend, business email compromise (BEC) accounted for nearly one-third of all reported claims in H1 2024, a 9% increase for this historically low severity event type. 

Companies with more than $100 million (£76,901,500) in revenue saw a 60% spike in the frequency of BEC attacks, while claims severity among these businesses increased by 140%.

Coalition attributes this stark rise to the burgeoning use of AI by threat actors to enhance their attacks, improving success rates and making it easier to produce phishing emails at mass scale but more difficult to detect.

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“Although the frequency of using ransomware as an attack strategy actually decreased this half, we saw a marked spike in the severity and demand amounts, especially those associated with the Play and BlackSuit ransom variants,” said Rob Jones, Coalition’s head of claims.

“Despite the increase, we were able to cut ransom demands in half through successful negotiations by our affiliate Coalition Incident Response, but the facts remain clear: the use and impact of ransomware remains as volatile as ever.”

Last month, research showed that 75% of organisations have been hit by ransomware more than once this year, with as many as one in five people falling victim to infostealer malware infection, while analysis from Beaming showed that UK businesses encountered over 180,000 cyber-attacks each in just three months, facing a new attack every 44 seconds.