April 12, 2021
Pandemic boom in cyber-crime
We have seen an increase of over 30% in cyber-attacks during the height of the pandemic and UK businesses have lost over £6.2 million to cyber scams. Disturbingly, what we haven’t seen is an increase in businesses taking out Cyber Insurance.
A unique study by analysing suggests criminals are exploiting official government announcements to target victims – as well as media coverage including cyber-crime campaigns. The study found that 86% involved phishing and/or smishing, 65% involved malware and 34% involved financial fraud. Hacking and denial of service were involved in five per cent of cases respectively.
The rise in cyber- crime is nothing new, no doubt if we hadn’t fallen victim to a global pandemic, cyber criminals would have found an alternative. Nonetheless, cyber-crime is most definitely a growing threat with over a quarter of UK companies listing cyber-attacks as a top risk faced by their business, particularly SMEs. It may be that the learnings from the highly publicised Business Interruption cases have played a part in businesses reviewing their risk profile, ensuring that in future they have all relevant covers in place.
Insurers have reacted and their products are evolving to ensure the cover on offer keeps pace with the change in attacks. This has included improved business interruption cover within cyber policies and expanded policy coverage to include financial losses from cyber-crime. What has always been on offer, and in our view one of the most important aspects of cyber insurance, is the specialist support available in the immediate aftermath of an attack. Very few SMEs will have employees or suppliers with the skills and experience to deal with a sophisticated cyber-attack and get the business back up and running. Some may be world leading in their niche sector, but wouldn’t even know where to start when faced with a cyber-attack.
As business starts to reopen they will undoubtedly be looking to reduce costs, rather than increase them. However, we are starting to see clients take out this cover as they acknowledge just how reliant they are on their IT systems and the potential costs of an attack.
We’re always happy to talk to clients old and new about their cyber risk and how they can protect themselves, just get in touch.