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One of the US’s largest insurance companies reportedly paid $40 million to ransomware hackers

One of the US’s largest insurance companies reportedly paid $40 million to ransomware hackers


The ransom demands are rising

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Illustration by Alex Castro / The Verge

CNA Financial, one of the largest US insurance companies, paid $40 million to free itself from a ransomware attack that occurred in March, according to a report from Bloomberg. The hackers reportedly demanded $60 million when negotiations started about a week after some of CNA’s systems were encrypted, and the insurance company paid the lower sum a week later.

If the $40 million figure is accurate, CNA’s payout would rank as one of the highest ransomware payouts that we know about, though that’s not for lack of trying by hackers: both Apple and Acer had data that was compromised in separate $50 million ransomware demands earlier this year. It also seems like the hackers are looking for bigger payouts: just this week we saw reports that Colonial Pipeline paid a $4.4 million ransom to hackers. While that number isn’t as staggering as the demands made to CNA, it’s still much higher than the estimated average enterprise ransomware demand in 2020.

Law enforcement agencies recommend against paying ransoms, saying that payouts will encourage hackers to keep asking for higher and higher sums. For its part, CNA told Bloomberg that it wouldn’t comment on the ransom, but that it had “followed all laws, regulations, and published guidance, including OFAC’s 2020 ransomware guidance, in its handling of this matter.” In an update from May 12, CNA says that it believes its policyholders’ data were unaffected.

According to Bloomberg, the ransomware that locked CNA’s systems was Phoenix Locker, a derivative of another piece of malware called Hades. Hades was allegedly created by a Russian group with the Mr. Robot-esque name Evil Corp.

Correction: Bloomberg wrote that the ransomware used against CNA was a derivative of one created by Evil Corp; we initially suggested it was Evil Corp’s original ransomware instead. We regret the error.