The real cost of weak cyber security. $445 billion in preventable losses
The world’s 10 largest economies lost $445 billion USD annually through cyber-crime last year. Concerned about cyber security? You’re not alone.
Fewer than 10 per cent of companies currently purchase cyber-specific insurance policies, suggesting businesses are ill-prepared to face the growing threat to intellectual and data property rights.
A new report from Allianz Global Corporate & Specialty (AGCS) indicates the global cyber insurance market is forecast to grow to more than $20 billion USD by 2025, a compound annual growth rate of over 20 per cent. The bulk of that increase will be felt in North American markets, according to the report.
The risks to businesses from the worldwide web has increased exponentially year to year, with companies reporting it as the fifth largest risk in this year’s “Allianz Risk Barometer”, compared to its 15th place ranking just two years ago.
Cyber security costs include loss of brand appeal
Loss of reputation to the company whose data has been breached is the biggest factor. With negative media coverage to such incidents, the word about data theft can mean the ruination of many companies, leading to damaged reputation, loss of market share and a critical loss of trust. Nearly three-quarters of customers would leave an organization after a data breach, a potentially catastrophic loss of future revenue.
Business interruption is also an inevitable hassle with any cyber-crime, regardless of whether the outside world finds out about the breach. Companies ill-prepared for such events must then spend time and resources by making hasty, frantic upgrades to their system that should already have been planned and implemented from the outset.
Damages are paid out to customers who have lost data, but the other big concerns are loss of trade secrets, and website and e-commerce downtime. Extortion from hackers with Trojan horses is still very much a 2015 issue.
How to prevent cyber security problems. Computer network monitoring, employee policies and more
When identifying cyber risks, companies should consider both physical and digital security controls, prioritizing assets and implementing policies to protect them. Create employee education and awareness training. Institute monitoring policies and procedures for all networks and systems. Develop incident management procedures, including response and disaster recovery. Most of all, develop a culture of security throughout your organization – “When you see something, say something.”