Sophos study finds MDR services reduce cyber insurance claims by 97.5%, ensure faster recovery, and offer more predictable cybersecurity outcomes.

Sophos Study: MDR Services Dramatically Reduce Cyber Insurance Claims

Sophos, a global leader in cybersecurity, has released a new independent study quantifying the financial impact of various cybersecurity solutions on cyber insurance claims. The findings provide critical insights into how different security approaches—namely Managed Detection and Response (MDR), Endpoint Detection and Response (EDR/XDR), and traditional endpoint security—affect insurance payouts following cyberattacks.

Key Findings: MDR Services Reduce Cyber Insurance Claims by 97.5%

According to the study, organizations using MDR services experience significantly lower cyber insurance claim amounts compared to those relying solely on endpoint security solutions. The research highlights:

The median claim for organizations using MDR services was $75,000, compared to $3 million for organizations using only endpoint security.
Endpoint-only users tend to claim 40 times more than MDR users after a cyber incident.
Organizations using EDR/XDR tools in addition to endpoint security saw an average claim of $500,000, which is still six times higher than MDR users.

These findings underscore the effectiveness of MDR services in swiftly detecting, blocking, and neutralizing threats before they escalate into costly incidents.

Bruno Durand, Vice President of Sales for Southern Europe at Sophos, explains:

“Every year, organizations spend huge amounts of money on cybersecurity. By quantifying the impact of different security controls, this study helps them focus on the most cost-effective investments. Insurers, too, have a major influence on cybersecurity spending by requiring specific security measures for coverage and offering premium discounts accordingly. This research enables them to encourage investments that truly mitigate incident outcomes and claim amounts.”

MDR Ensures More Predictable Cyber Insurance Claims

The study also examined claim predictability, a crucial factor for both insurers and organizations looking to manage risk. The results showed:

MDR users had the most predictable claims in terms of consistency and impact reduction.
EDR/XDR users had the least predictable claims, likely because the success of these tools depends on the skill and responsiveness of internal security teams.

Unlike standalone security tools that require internal expertise, MDR provides continuous 24/7 monitoring, investigation, and response by security experts, significantly reducing uncertainty in insurance claims.

MDR Users Recover Faster from Ransomware Incidents

Cyberattacks, especially ransomware incidents, often result in significant business disruption. The study analyzed the recovery time for different security solutions and found:

MDR users had the fastest recovery time after a ransomware attack, with an average of just three days.
Endpoint security users had a median recovery time of 40 days.
EDR/XDR users took the longest to recover, with a median of 55 days.

This highlights the superior efficiency of MDR services in incident response and recovery, minimizing downtime and financial losses for affected organizations.

Sally Adam, Senior Director of Solution Marketing at Sophos, commented on the implications:

“The research confirms what many already suspect: the type of security solution used has a major impact on cyber insurance claims. Cyberattacks are inevitable, but robust defenses are not. These results provide organizations with critical insights to optimize their cybersecurity investments while helping insurers refine their policies to reduce risk exposure.”

Study Methodology

The study was conducted by Vanson Bourne on behalf of Sophos in the second half of 2024. It analyzed:

282 claims from 232 organizations (with 50 to 3,000 employees) affected by cyberattacks in the past 12 months.
Organizations using cybersecurity solutions from 19 endpoint protection vendors and 14 MDR vendors.
All respondents had Multi-Factor Authentication (MFA) enabled at the time of the cyberattacks.
Statistical validation was carried out using multivariate regression models to ensure data robustness.

Final Thoughts: MDR as a Game-Changer for Cybersecurity and Insurance

The findings from Sophos’ study offer compelling evidence that MDR services significantly reduce both financial and operational impact following cyber incidents. With cyberattacks becoming more frequent and sophisticated, insurers and businesses alike may need to re-evaluate their security strategies to prioritize proactive, expert-led protection over reactive solutions.

For organizations looking to cut cyber insurance costs, reduce downtime, and strengthen their overall security posture, investing in MDR services appears to be the most effective strategy based on the study’s findings.