Amidst the global crisis of COVID-19 there is another danger threatening businesses in 2021. Cybercrime has been on the rise in recent years and is set to reach new heights over the coming decade. In order to protect themselves from the catastrophic effects of cybercrime, businesses are realising the importance of cyber security and cyber insurance.
Research by Finaria.it forecasts the cyber insurance market to jump by 21% in 2021, hitting a market value of $9.3bn. Statistics predict that by 2025 the cyber insurance market will reach a value of $20.4bn.
The rapid move towards technology in order to conduct everyday business has created a world more vulnerable to cyber-attacks. It is not only large organisations that are realising the necessity of cyber insurance but also SMEs. A breach of cyber security can be crippling.
Healthcare sector most at risk from cyber-attacks
Healthcare is the sector most frequently targeted by cyber-attacks. A recent study shows that claims from the healthcare sector accounted for almost 25% of all cyber insurance claims between 2013 and 2019. This was followed by IT and telecommunications with 10%. Insurance, retail and wholesale and manufacturing complete the top five with 9.9%, 9.2% and 7.1%.
The Ponemon Institute’s Cost of a Data Breach report shows the highest cost of cyber-attacks are suffered by the healthcare sector at $7.13m per breach. Energy is second with a cost of $6.39m, followed by financial services $5.85m, pharma $5.06m and technology $5.04m.
Cyber security and COVID-19 – an exasperated risk
Research by Bluevoyant.com has revealed that attacks on the biotech and pharmaceutical industry increased by 50% in 2020. Companies working to create the COVID-19 vaccine were subject to high levels of malicious attacks compared to other pharmaceutical organisations.
There is a clear link between the emergence of remote working throughout the COVID-19 pandemic and the increase of sensitive data being compromised. As data applications and the use of technology rise, cyber criminals take advantage of the vulnerability that this presents. Organisations of all sizes are becoming more aware of the risks and the requirement for increased cyber security.
Cyber risk – how prepared are you?
Data shows that over 75% of cyber insurance claims in the period from 2013 to 2019 were related to breach incident response and crisis management. Coming in second, data privacy breaches and cyber-extortion a close third. These numbers are set to grow as businesses operate in the digital world more than ever before.
Without the protection of cyber insurance, the significant cost of a data breach could see the end of an organisation. Worryingly, up to as many as 30% of UK businesses don’t have cyber insurance and under less than 13% of SMEs. However, Forbes found that 55% of enterprise executives plan to increase their cyber security budgets in 2021 and over half are planning to add full time cyber staff.
Driven by the very real threat of cybercrime, it is this commitment to ensure cybersecurity and protection that will see the rise in the cyber insurance market. We work with our insurance partners to understand your business and find the right cyber insurance coverage to protect you. For more information get in touch with a member of our team.