Cyber Attacks Damage Customer Retention – Hiscox Report

Two-thirds of organisations faced an increase in cyber incidents over the past year, according to research from Hiscox, the Bermuda-headquartered global specialist insurer listed on the London Stock Exchange.
The insurer’s annual Cyber Readiness Report, which surveyed 2,150 cyber security professionals across eight countries, reveals 67% of organisations globally experienced more cyber incidents in 2024 than in 2023, with UK figures reaching 70%.
Impact on customer relations
The impact on customer relationships has doubled since 2023. The research shows 47% of organisations struggled to attract new customers following a cyber attack, up from 20% in the previous year. The loss of existing customers rose to 43% from 21%, while negative publicity affected 38% of businesses compared to 25% in 2023.
Eddie Lamb, Chief Information and Security Officer at Hiscox, says: “In today's business environment, protecting the reputation of any business is just as critical as safeguarding the physical assets. Businesses will spend not only years but also thousands if not millions of pounds building their reputation, only to see it destroyed in minutes following a cyber attack.”
Emerging technology risks
The integration of Generative AI (Gen AI) - machine learning systems that can create content from text to images – presents new security challenges. The report indicates 70% of surveyed businesses have implemented Gen AI in their operations, with 56% expecting it to affect their cyber security risk profile.
The research identifies a skills gap in managing new technology risks, with 34% of organisations reporting their cyber security measures are compromised due to insufficient expertise.
The relationship between innovation and security has become central to business strategy, with 26% of organisations citing cyber risk management as a key driver of their innovation plans.
“Businesses need to see technological innovation and cyber security as complementary, rather than conflicting, forces,” says Eddie. “Business leaders will need to continue to invest in attracting the right expertise to manage emerging technology risks if they are to not just survive but thrive in a world of expanding technologies with their reputations intact.”
Ransomware response
The report also examines ransomware – malicious software that encrypts files until a payment is made – finding that organisations prioritise reputation protection when deciding whether to pay attackers. The primary motivations for ransom payment were protecting customer data, maintaining reputation, and recovering data in the absence of backups.
However, the effectiveness of paying ransoms remains low. Only 18% of businesses that paid ransoms achieved complete data recovery.
“It is vital that businesses continue to foster an environment where cyber education is a continuous process, ensuring every member of the organisation understands the critical role they play in maintaining cyber security,” Eddie says.
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