AGCS urges protective policies as awareness of cyber risks increase

cyber risks
According to AGCS, cyber risk is a major and fast-growing threat to businesses with cyber crime alone costing the global economy approximately US$445 bn a year

A new report by multinational Allianz Global Corporate & Speciality (AGCS), a research and loss analysis service provider, has released a new report examining the latest trends in cyber risks and emerging threats globally.

According to AGCS, awareness of business intelligence and insurance associated with cyber technology is increasing.

The firm states that within the next five to 10 years, business intelligence will be seen as a key risk and a major element of the cyber insurance landscape.

The global business insurance company adds that heightened awareness of cyber exposure and regulatory change will drive demand for cyber insurance.

AGCS adds that currently, less than 10% of companies are investing in cyber-specific policies and notes that as companies become increasingly mindful of cyber risks, cyber insurance premiums are set to grow globally – escalating from US$2 billion annually to over US$20 billion over the next 10 years.

Nigel Pearson, cyber insurance lead at AGCS, said: “Growth in the US is already underway as data protection regulations help focus minds, while legislative developments and increasing levels of liability will see growth accelerate in the rest of the world.

“There is a general trend towards tougher data protection regimes, backed with the threat of significant fines in the event of a breach.”

Other countries around the world looking to also enforce new data protection rules include Hong Kong, Singapore and Australia.

AGCS says that the EU is seeking to agree upon pan-European data protection rules. It expects that “tougher guidelines will be employed on a country-by-country basis.”

Cyber risks in Industrial Control Systems

The report “A Guide to Cyber Risk: Managing The Impact of Increasing Interconnectivity” also notes the advent of the Internet of Things and growing number connected devices, “creates further vulnerabilities”.

According to the report, industrial control systems (ICS) are particularly vulnerable as several of these systems used today were designed before cyber security became a priority issue.

“An attack against an ICS could result in physical damage such as fire or explosion, as well as business intelligence.”

Furthermore, AGCS explains that traditionally, attention was emphasised on corporate data breaches and privacy concerns, but future security concerns will become more complex – with security risks extending to intellectual property theft, cyber extortion and the impact of business interruption following a cyber-attack or from operational or technical failure.

Cyber insurance must evolve to provide broader and deeper coverage, says AGCS, as interest grows among the telecommunications, retail, energy, utilities and transport sectors, as well as from financial institutions.