Insurance giant Allianz has released its latest Annual Risk Barometer and cyber incidents rank as the most important business risk globally. For the first time ever, cyber incidents (39% of responses) ranks as the most important business risk globally in Allianz Risk Barometer 2020. with Business Interruption (BI) in second place
Awareness of the cyber threat has grown rapidly in recent years, driven by companies increasing reliance on data and IT systems and a number of high-profile incidents. Seven years ago it ranked only 15th with just 6% of responses. Climate change has also risen to its highest ever position on the barometer, ranking at seventh place, with 27 per cent of the votes.
The two significant challenges that the Allianz Risk Barometer 2020 highlight are climate change and cyber risk.
But BI ranks second; changes in legislation and regulation, third; natural catastrophes, fourth; and market developments, fifth. These are all the prime concerns and challenges facing the industry according to 2,718 risk management experts from 102 countries and 22 industry sectors.
With companies’ increasing reliance on data and IT systems, awareness of cyber threat has grown exponentially in the last few years; seven years ago, it ranked as low down as 15th, with only six per cent of respondents’ votes. In addition to being the top risk globally, cyber incidents are among the top three risks in many of the countries surveyed, including Austria, Belgium, France, India, South Africa, South Korea, Spain, Sweden, Switzerland, the UK and the US.
A mega data breach, involving more than one million compromised records, now costs on average US$42 million, up eight per cent year on year.
Now also there are risks concerning climate change and changes in legislation and regulation. These categories which have both have made a considerable jump up the barometer since 2019 and are likely driven by the US-China trade war, Brexit and the ever-prevailing perils of global warming. In fact, climate change is already in the top three business risks for the Asia-Pacific region overall, and businesses most fear an increase in physical losses, the study reveals.
Cyber risk is continuing to evolve, with businesses facing larger and costlier data breaches, an increase in ransomware and spoofing incidents, and the possibility of fines or litigation after a cyber event, Allianz said.
Now the awareness of cybersecurity issues has risen alongside costs associated with successful cyberattacks. In 2013, cyber incidents ranked just 15th among risk managers’ concerns. “While 2019 saw no major global cyber incidents in the vein of past events like WannaCry and NotPetya, businesses are increasingly cognisant of the costs associated with being a victim of a cyberattack,” said Mark Mitchell, regional chief executive, Asia-Pacific of Allianz Global Corporate and Specialty, a division of the Allianz Group.
IBM’s recent Cost of a Data Breach Study found the average cost per data breach was about US$4 million and that the health care industry had the highest costs associated with such a breach, at about US$6.5 million.
Costs associated with data breaches had risen 130 per cent in the past 14 years. Most data breaches were the result of malicious cyberattacks, according to the IBM report.
Source: Cyber Security Intelligence