The latest report from ALLIANZ GLOBAL CORPORATE & SPECIALTY provides interesting insights on trends in cyber risks.
The nine trends identified illustrate that the combination of a constantly evolving threat landscape, increasing vulnerabilities arising from inter connectivity and reliance on technology is giving rise to increasing cyber exposure.
- Laxer security post Covid-19 which heightens cyber risks
- Business interruption and digital supply chain vulnerability growing
- Ransomware now the most prominent cyber-crime threat
- Business email compromise attacks surging
- Mega data breaches come with increasing costs
- Increasing regulatory exposure – at home and overseas
- Class action litigation a developing situation
- Buying a company can bring cyber risk
- Nation state increase risks
As noted in the report, although cyber-crime generates the headlines the analysis shows that more mundane technical failures, IT glitches or human error incidents are the most frequent generator of claims, although, overall, the financial impact of these events is, on average, limited compared with external events.
According to the Allianz Risk Barometer 2020, cyber and business interruption now rank as the top two risks for companies respectively. The report also recognises that ransomware attacks are increasingly becoming one of the biggest causes of cyber loss.
The increasing regulatory and litigation risks arising from data protection fines and class actions further highlight how the cyber risks to clients go beyond technical and operational risks but extends to issues arising from data protection legislation such as the GDPR, or affected consumers bringing class actions in response to a data breach incidents. It appears that the emergence of these risks are set against a backdrop of increased consumer awareness of data protection and privacy rights, engagement and activism, and the risks to an organisation affected by a cyber breach.
Despite the huge advances companies have made in cyber risk awareness in recent years, many are still playing catch-up and often do not realize how important their digital assets are until something happens.