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In 2019, ProPublica wrote how paying ransoms benefit insurance companies. They called this: "The extortion economy: How insurance companies are fueling a rise

by hhs 5y ago

In 2019, ProPublica wrote how paying ransoms benefit insurance companies. They called this: "The extortion economy: How insurance companies are fueling a rise in ransomware attacks. Even when public agencies and companies hit by ransomware could recover their files on their own, insurers prefer to pay the ransom. Why? The attacks are good for business." [0] [0]: https://www.propublica.org/article/the-extortion-economy-how-insurance-companies-are-fueling-a-rise-in-ransomware-attacks https://www.propublica.org/article/the-extortion-economy-how...

mianos 5y ago
For such a long article it's (IMHO) a fairly naive view. Sure insurance companies make some profit, specially in the beginning but, eventually, the price gets higher and higher and the cost to secure becomes less than the cost of insurance. We had a similar issue with builder's insurance down here in Australia. It's was (and still is) cheaper to get insurance than build a quality building. Eventually that caught up with the builders (and they moved to using a seperate corporate entity for each building and closing it after the building is built, but that's another story of corruption).
- cutemonster 5y ago
  > a seperate corporate entity for each building Hmm, so if buying a house, it can be good to first find out if this house is the only one the construction company has built > insurance companies make some profit, specially in the beginning I've gotten the impression that CEOs often don't plan much longer than any bonus program periods? And, later when getting too expensive, can't they just then start telling the companies to use their backups instead.
vegetablepotpie 5y ago
Thank you for posting that link, it was really informative. > ProPublica has found that they [insurers] often accommodate attackers’ demands, even when alternatives such as saved backup files may be available. What a perverse set of incentives. Insurance companies are paid to manage risk. Risks go up the more they pay ransoms. As risks go up, the risks are more visible, more companies get policies, insurance gets more money. This is bordering or racketeering. How many times do people on HN say “back up your files”. Certainly that’s the way to do it if you want less ransomware. It’s not sexy, it’s not “visible”, but it will reduce your risk. But apparently, the goal here is to encourage more ransomware.

by hhs 5y ago

mianos 5y ago

For such a long article it's (IMHO) a fairly naive view. Sure insurance companies make some profit, specially in the beginning but, eventually, the price gets higher and higher and the cost to secure becomes less than the cost of insurance. We had a similar issue with builder's insurance down here in Australia. It's was (and still is) cheaper to get insurance than build a quality building. Eventually that caught up with the builders (and they moved to using a seperate corporate entity for each building and closing it after the building is built, but that's another story of corruption).

cutemonster 5y ago
> a seperate corporate entity for each building Hmm, so if buying a house, it can be good to first find out if this house is the only one the construction company has built > insurance companies make some profit, specially in the beginning I've gotten the impression that CEOs often don't plan much longer than any bonus program periods? And, later when getting too expensive, can't they just then start telling the companies to use their backups instead.

vegetablepotpie 5y ago

Thank you for posting that link, it was really informative. > ProPublica has found that they [insurers] often accommodate attackers’ demands, even when alternatives such as saved backup files may be available. What a perverse set of incentives. Insurance companies are paid to manage risk. Risks go up the more they pay ransoms. As risks go up, the risks are more visible, more companies get policies, insurance gets more money. This is bordering or racketeering. How many times do people on HN say “back up your files”. Certainly that’s the way to do it if you want less ransomware. It’s not sexy, it’s not “visible”, but it will reduce your risk. But apparently, the goal here is to encourage more ransomware.