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🔒 '''Ransomware''' is a category of malicious software that encrypts a victim's data or systems and demands payment — typically in cryptocurrency — in exchange for the decryption key needed to restore access. For the [[Definition:Insurance | insurance]] industry, ransomware has become one of the most consequential loss drivers within [[Definition:Cyber insurance | cyber insurance]], transforming what was once an emerging peril into a headline risk that reshapes [[Definition:Underwriting | underwriting]] appetites, [[Definition:Pricing model | pricing]], and [[Definition:Policy wording | policy terms]] across the market. Attacks target organizations of every size, from hospitals and municipalities to multinational corporations, often exploiting phishing emails, unpatched software, or compromised credentials to gain initial access.

⚙️ Once inside a network, the malware spreads laterally, encrypting files and databases before presenting a ransom demand. Sophisticated threat actors increasingly employ "double extortion," exfiltrating sensitive data before encryption and threatening public release if payment is not made — adding a [[Definition:Data breach | data-breach]] dimension to what is already a [[Definition:Business interruption insurance | business-interruption]] event. When a [[Definition:Policyholder | policyholder]] triggers a [[Definition:Cyber insurance | cyber]] [[Definition:Insurance policy | policy]], the [[Definition:Insurance carrier | carrier]] typically deploys an [[Definition:Incident response | incident-response]] team that coordinates forensic investigation, legal counsel, negotiation with the threat actor (where permitted), and system restoration. [[Definition:Claim | Claims]] can encompass ransom payments, forensic and legal costs, lost revenue during downtime, [[Definition:Regulatory compliance | regulatory]] fines, and [[Definition:Notification cost | notification expenses]].

🛡️ The surge in ransomware activity since the late 2010s has fundamentally altered the cyber insurance landscape. Carriers have responded with tighter [[Definition:Underwriting guidelines | underwriting requirements]] — mandating [[Definition:Multi-factor authentication (MFA) | multi-factor authentication]], endpoint detection, and tested backup protocols as conditions of [[Definition:Coverage | coverage]] — and many have introduced [[Definition:Coinsurance | coinsurance]] provisions or [[Definition:Sublimit | sublimits]] specific to ransomware events. [[Definition:Reinsurer | Reinsurers]] and [[Definition:Rating agency | rating agencies]] scrutinize [[Definition:Aggregation risk | aggregation risk]], concerned that a single widespread attack could trigger correlated losses across an insurer's [[Definition:Book of business | book]]. For the broader market, ransomware illustrates how rapidly evolving threats can force an entire [[Definition:Line of business | line of business]] to re-examine its assumptions almost overnight.

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Cyber insurance]]
* [[Definition:Data breach]]
* [[Definition:Incident response]]
* [[Definition:Business interruption insurance]]
* [[Definition:Aggregation risk]]
* [[Definition:Social engineering fraud]]
{{Div col end}}

Definition:Ransomware - Revision history

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