Cyber Risks 2021 - Are you ready?
In part one of our three part series, the Insurely team highlight the growing threat of cyber crime to all businesses in 2021 and why you need to review your business's cyber risk exposure now.
The Cyber Security Landscape in 2021
Over the last year, we have seen a number of major attacks on high-profile Institutions, including the DDOs attack on the NZX in August 2020. Covid-19 has forced many people into working remotely, presenting opportunities for cyber-criminals to exploit.
New technologies are creating unforeseen vulnerabilities. Supply chains are becoming more complex, with exposure to third parties in ecosystems that may not have the cyber resilience of your own company.
There has never been a more important time to review your business’s Cyber risk exposure, focusing on your risk management and adding Cyber Insurance to your toolkit.
5 Key Reasons To Consider Cyber Liability Protection
All businesses face cyber risks. Hackers don’t discriminate based on occupation or turnover; they look for vulnerabilities to exploit.
Here are some key reasons to consider cyber liability cover:
1. You are reliant on technology to operate your business.
2. Your business holds large volumes of personal data
3. Protection when cyber security fails – some hackers exploit human errors to gain access to your systems by phishing or social engineering
4. Your third parties require cyber insurance as a contractual requirement and/or it is part of due diligence at board level.
5. Regulation – The Privacy Act 2020 is now in force in NZ, which includes compulsory data breach notification requirements
The Cyber Losses Are Growing
Across the globe the insurance markets are seeing an increase in frequency and severity of cyber losses.
As we enter into a hardening insurance market where premiums increase, the key message is to make sure your cyber security controls are in place and that you can demonstrate to insurers that you’re taking all necessary precautionary steps to mitigate the risk of any cyber issues.
So, what is driving the increase in cyber claims for insurers? Ransomware is a major problem across all industries, irrespective of the size of the businesses.
According to Coverware, the average ransomware payment has increased from US$84,116 in Q4 2019, to an average of US$154,108 in Q4 2020 - an 82% jump.
Many of these attacks infiltrate personally identifiable information and there is the huge cost of the business downtime to work through the mess of it all. Coverware estimates businesses are affected for an average of 21 days following ransomware incidents.
So, What Is Ransomware?
The Insurance Advisernet NZ team have described Ransomware as "typically malicious code that is injected, or installed, on a server or network that locks all the files it can get to. There are loads of varieties out there, but basically it means you can no longer access anything as the ransomware has either locked it down, or changed all the file extensions. Most users are then presented with a screen showing instructions for payment of a ransom to be given the decryption key to unlock their files"
Example 'WannaCry' in 2017. An estimated 200,000 computers and 150 countries fell victim to the WannaCry Ransomware. It searched computers for 176 different file types and encrypted them. A pop up then appeared, asking users to pay a ransom of US$300 in bitcoins to unlock their files. The note indicated that if payment is not made within seven days, the encrypted files will be deleted.
In Part 2 we look at some of the important steps and strategies that businesses can take to mitigate cyber security risks.
The Insurely team are here to help. Insurely are fully independent commercial insurance brokers that tailor insurance programmes to your exact needs. Get in touch with us via our website, LinkedIn or Facebook