Allianz: Internal corporate failures drive cyber claims
Allianz has released a new report examining current trends in enterprise cyber risk and the overall effect of increased interconnectivity.
As part of its research, the company analysed 1,736 cyber insurance claims at a total value of US$770m. Prominent among its findings were the following:
- The most expensive losses come from external cyber attacks. However, the vast majority of annual infractions originate from internal failures.
- From 2015 to 2020 the average cost of cyber crime has increased 72% to $13m.
- Over the same period, there has been a 67% rise in the number of cases.
The growing ubiquity of digital technology within modern business would explain this ascending trajectory of cyber crime.
Allianz has tracked the incremental increase in cyber risk and its implications on insurance: In 2016, 77 claims were made; in 2019, this figure grew over 1,000% to 809; and in 2020, the company states that it has already received 770 claims between Q1 and Q3.
The pandemic’s effect of moving workforces to remote working could also amplify this risk in the short-term. Ensuring companies are secure from the inside should be given high priority, Allianz argues.
“Losses from incidents such as distributed denial of service (DDoS) attacks or phishing and ransomware campaigns account for a significant majority of the value of cyber claims today,” says Catharina Richter, Global Head of the Allianz Cyber Center of Competence.
“But although cyber crime generates the headlines, everyday systems failures, IT outages and human error incidents can also cause problems for companies, even if their financial impact is not, on average, as severe. Employers and employees must work together to raise awareness and increase cyber resilience.”
Combined with Munich Re’s valuation of the contemporary cyber risk market at $7bn, it is highly likely that this strand of insurance will become exponentially more valuable in the coming years.
