In a report compiled by Allianz Global Corporate & Specialty (AGCS), most Cyber claims came from business interruptions.
AGCS looked at over 1700 insurance cases in the last five years, the losses of which totaled over 660 million euros or $781.5 million, revealing that the average cost of cybercrime for organizations has risen to $13 million. In the first nine months of 2020 alone, there were 770 reported incidents registered with the AGCS, compared to 809 for the entire year of 2019.
The most common cyber losses have been attributed to internal issues. 54% of the claims were found to be caused by accidental in nature, whether through employee error or a technical error. But the most valuable losses were attributed to malware, phishing and Denial of Service (DDos) attacks, with 85% of their claims being related to one of those three. Globally, over half a million ransomware incidents were reported in 2019, with over $6.3 billion in demands.
According to Joerg Ahrens, global head of long-tail claims at AGC, “Whether due to ransomware, human error or a technical fault, the loss of critical systems or data can bring an organization to its knees in today’s digitalized economy. If an online platform is unavailable due to a technical glitch or cyber event, it could bring large losses for companies that rely on it, particularly given today’s increasing reliance on online sales or digital supply chains.
Cyber crime is a dangerous and devastating prospect and will continue to grow. With the holidays around the corner and the pandemic driving online sales, review your cyber safety protocols and procedures while talking with your broker about what is covered in your policy.