The Allianz Group, specifically its Global Corporate & Specialty (AGCS) unit, has just released its Risk Barometer 2020. More than 2,700 risk management experts from over 100 countries responded to the survey.
For the first time in the annual survey’s nine-year history, the cyber incidents category ranks as the top risk for businesses with 39 percent of respondents citing it, bumping business interruption (37 percent) into second place. Seven years ago cyber risks were only 15th on the list, named by just 6 percent of participants.
A growing number of companies are being confronted with a range of cyber challenges, including ever bigger and more costly data breaches and an increasing number of incidents involving ransomware and business email compromise (spoofing). A mega breach (meaning one in which more than one million records are leaked) now sets a company back $42 million on average. If over 50 million records are compromised in the breach, the cost now reaches a staggering $388 million on average, a rise of 11 percent in a year-on-year comparison.
With regard to ransomware, the latest Risk Barometer confirms an increase in the financial damage caused by such incidents, as attackers are ever more frequently targeting larger corporations using more sophisticated techniques attempting to extort higher ransom payments from them. Even though attackers have increasingly been setting their sights on the manufacturing sector, the losses have been highest for law firms, consultants and architects, for whom IT systems and data are of vital importance.
The survey also shows a rise in the frequency of spoofing attacks, where attackers utilize social engineering and phishing emails to fool employees into revealing login details or executing bogus transactions. The FBI estimates that these scams have resulted in losses of $26 billion around the globe since 2016.
Participants in the survey identified preparation and training as the most effective means of mitigating cyber risks. Business resilience measures and business continuity planning also play crucial roles in managing the risks. The report goes on to emphasize the importance of regularly testing and reviewing response plans.
For those interested, the entire 24-page “Allianz Risk Barometer – Identifying the Major Business Risks for 2020” survey report is available for download as a PDF from the AGCS website after registration.