The recent cyberattacks on gaming and hospitality giants MGM Resorts International and Caesars Entertainment have sent shockwaves through the cybersecurity and insurance industries.
Guy Carpenter’s Cyber Center of Excellence has issued a Cyber Event Analysis briefing shedding light on these incidents and their implications.
One of the key takeaways from the analysis is the tenacity of ransomware groups, exemplified by ALPHV, a notorious operation known for its highly customisable malware and willingness to target large organisations.
ALPHV’s emergence as a successor to the DarkSide ransomware group serves as a stark reminder of the challenges faced by both industries and governments in combating malicious cyber activities.
Moreover, ransomware remains a major concern for insurers and insureds alike. Following a surge in ransomware attacks since 2019, the cyber insurance sector witnessed significant rate increases, with Guy Carpenter’s cyber client group reporting an average cumulative rate increase of 183% since 2020.
While improved rate adequacy and enhanced cyber hygiene restored confidence in the industry and attracted new capacity, ransomware activity has spiked again in 2023, with ransom payments approaching levels seen in late 2021.
One critical aspect emphasised in the analysis is the need for insurers to address aggregation and volatility. Despite both MGM Resorts and Caesars Entertainment falling victim to the same threat actor employing similar tactics, these incidents may be categorised as separate events rather than a single catastrophic event.
The attacks involved individual targeted reconnaissance efforts, compromising distinct systems owned by different entities. However, insurers are urged to consider these losses holistically to manage overall aggregation risk.
The implications of these cyberattacks extend to the insurance market. Resulting losses for many insurers participating in the MGM and Caesars cyber towers could lead to a more cautious approach to pricing and terms within the industry.
As the cyber threat landscape continues to evolve, insurers and businesses alike must adapt to the changing dynamics and prioritise cybersecurity to mitigate potential financial and reputational damages.
Guy Carpenter’s global cyber practice, with its team of experts, is at the forefront of addressing these challenges, providing innovative solutions and insights to enhance cyber reinsurance and retrocession.
Their expertise in placement design, peer benchmarking analysis, and cyber aggregation modeling ensures a comprehensive approach to managing cyber risk in an ever-evolving digital world.
