Businesses must prepare for new generation of cyber risks

A new report by specialist insurer Allianz Global Corporate & Specialty (AGCS) was released today, placing corporate cyber security in the limelight and giving companies advice on how to better protect themselves.

The report, named A Guide to Cyber Risk: Managing The Impact of Increasing Interconnectivity, “examines risk trends and emerging perils around the globe”. It also identifies future mitigation strategies, including the role of insurance.

With companies increasingly looking to digitalise their business, the security aspect has become vital. According to a press release following the report, cyber-crime alone costs the global economy approximately $445 billion a year (£289bn), with the world’s largest 10 economies accounting for half this total.

In the UK, the cost of cyber-crime as a percentage of GDP is .16 per cent, with an estimated cost of $4.3bn (£2.8bn).

The report, which can be found on this link (PDF) talks about cyber security and best practices, evolution and growth of cyber insurance, future cyber trends, and the impact of technology on emerging cyber risks.

“Growth in the US is already underway as data protection regulations help focus minds, while legislative developments and increasing levels of liability will see growth accelerate in the rest of the world,” says Nigel Pearson, who is globally responsible for cyber insurance at AGCS. “There is a general trend towards tougher data protection regimes, backed with the threat of significant fines in the event of a breach.”

The AGCS report highlights steps companies can take to address cyber risk. Insurance can only be part of the solution, with a comprehensive risk management approach being the foundation for cyber defense. “Once you have purchased cyber insurance, it does not mean that you can ignore IT security. The technological, operational and insurance aspects of risk management go hand in hand,” explains Jens Krickhahn, expert for cyber & fidelity at AGCS Central & Eastern Europe.