MythBusters: For years, a persistent concern has circulated among business leaders and cybersecurity professionals: Does buying cyber insurance actually make an organization a more attractive target for ransomware attackers? The logic behind this fear seems intuitive. If attackers believe a company is insured, they may assume it has the financial backing to pay a ransom quickly, potentially making it a more lucrative victim.
To put this debate to rest, Marsh partnered with the University of St. Gallen, specifically its Institute of Insurance Economics, to conduct one of the most comprehensive studies to date on this topic. The findings, based on robust data and rigorous statistical analysis, are reassuring for organizations considering or already holding cyber insurance.
Why the Question Matters
Cyber insurance adoption has grown rapidly as ransomware attacks, data breaches, and business interruption incidents have become more frequent and costly. Yet skepticism remains. Some executives worry that cyber insurance could be a double-edged sword:
- Potential attacker motivation: Hackers might believe insured firms are more likely to pay ransoms.
- Visibility concerns: There is uncertainty over whether attackers can even identify which organizations carry cyber insurance during reconnaissance.
- Risk perception: Firms fear they may unintentionally increase their attack probability simply by transferring risk through insurance.
These concerns are not trivial. If cyber insurance truly increased attack likelihood, it would undermine one of the key tools organizations use to manage cyber risk.
Research Led by Data, Not Assumptions
To answer this critical question, Marsh’s Cyber Risk Intelligence Center (CRIC) collaborated with academic researchers to move beyond anecdotal evidence. The study leveraged more than a decade of proprietary insurance placement and cyber incident data, covering clients with annual revenues under US$1 billion.
Importantly, the dataset included:
- Companies that never purchased cyber insurance
- Companies that began purchasing cyber insurance during the study period
This distinction allowed researchers to compare firms over time, before and after cyber insurance adoption, rather than relying on simple cross-sectional snapshots.
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Methodology: Controlling for Bias
One of the strongest aspects of the study was its effort to minimize bias and isolate the true effect of cyber insurance purchase. The researchers applied advanced statistical modeling techniques and controlled for multiple variables that could otherwise distort results, including:
- Year-specific effects
- Company revenue
- Employee count
- Industry sector
- Geographic location
By accounting for these factors, the researchers ensured they were comparing organizations with similar risk profiles, rather than conflating insurance effects with unrelated business characteristics.
Companies were grouped into cohorts that demonstrated similar ransomware risk trends before any cyber insurance purchase. Once aligned around the point of purchase (referred to as time t = 0), researchers analyzed whether ransomware risk diverged between insured and uninsured firms.
Understanding the Results
For each time period studied, the researchers calculated:
- A point estimate representing the change in ransomware attack probability
- A 95% confidence interval around that estimate
In simple terms:
- If the confidence interval included zero, it meant there was no statistically significant difference in ransomware attack likelihood.
- If the interval rose clearly above zero, it would indicate higher risk for insured companies.
The findings were consistent and clear. Before the purchase of cyber insurance, insured and uninsured firms showed no meaningful difference in ransomware attack rates—confirming the comparability of the groups. After the purchase, there was still no statistically significant increase in ransomware incidents among insured companies.
In other words, the data showed no evidence that buying cyber insurance makes organizations more likely to be attacked.
Why Attackers Don’t Target Insured Firms
The results align with practical realities of cybercrime. While attackers may hope for large payouts, they typically lack reliable visibility into an organization’s insurance status. Reconnaissance efforts focus more on exploitable vulnerabilities, weak credentials, outdated systems, or exposed services than on insurance coverage, which is rarely public information.
Moreover, many organizations that purchase cyber insurance also improve their cybersecurity posture as part of underwriting requirements. This can include better controls, incident response planning, and security awareness—factors that may actually reduce overall risk.
What This Means for Organizations
The study delivers an important message for boards, executives, and risk managers:
- Cyber insurance does not increase ransomware risk.
- Purchasing coverage is a risk management decision, not a signal to attackers.
- Organizations can invest in cyber insurance without fear of becoming a bigger target.
Rather than encouraging attacks, cyber insurance can complement cybersecurity investments by providing financial resilience, access to incident response expertise, and structured recovery support when incidents occur.
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Looking Ahead: Beyond Frequency to Impact
While this research focused on whether cyber insurance affects the likelihood of ransomware attacks, future studies aim to examine severity and impact. Questions such as how insurance influences recovery speed, financial loss, operational downtime, and long-term resilience are equally important.
As cyber threats continue to evolve, evidence-based insights like these are essential. They help organizations move past myths and make informed decisions grounded in data rather than fear.
Final Takeaway
The long-standing myth that cyber insurance increases ransomware risk does not hold up under scrutiny. According to this landmark research by Marsh and the University of St. Gallen, organizations that purchase cyber insurance are no more likely to suffer ransomware attacks than those that do not.
For businesses navigating an increasingly hostile digital landscape, cyber insurance remains a proactive and responsible step toward managing cyber risk—without inviting additional danger.
