Businesses worldwide are becoming increasingly aware of the potentially significant disruption and damage that cyber crime and IT failures can create.
A new report from Allianz Global Corporate & Specialty (AGCS) has shed light on this trend, which could necessitate a refreshed approach to data recovery and security efforts. Speaking to 500 risk managers and corporate insurance experts from global businesses in 47 countries, the Allianz Risk Barometer for 2015 ranked cyber crime and IT failures among the top five global business risks for the first time.
This was an increase from eighth place in 2014 and 15th place in 2013, suggesting the issue is becoming an ever-more pressing concern as the quantity, complexity and prevalence of cyber attacks and IT disasters continue to grow.
Indeed, in Germany, the UK and the US cyber issues are now among the top three corporate risks, meaning they are seen as a problem comparable to supply chain risks, natural catastrophes and political headwinds.
When asked about the main causes of economic loss following such an incident, 61 per cent of those polled cited a loss of reputation, while 49 per cent were most concerned about the disruption to their day-to-day operations.
Although awareness of cyber risks is increasing, 73 per cent of respondents identified a feeling that many companies are still underestimating the different impacts they can cause, with budgetary constraints often used as a justification for a reluctance to commit to improvements in this area.
However, given the reputational damage, organisational chaos and data loss that such incidents can cause, it is clear that for some of these firms, a new approach is needed sooner rather than later.
Jens Krickhahn, practice leader for cyber and fidelity at AGCS Financial Lines in Germany and central Europe, said: “Cyber risks are very complex. Different stakeholders such as IT security architects and business continuity managers need to share their knowledge to identify and evaluate threat scenarios.
“Previously siloed knowledge needs to be incorporated in one thinktank which can look at risks holistically. The human factor should also not be underestimated, as employees can cause IT security incidents, inadvertently and deliberately.”
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