Another successful hacker attack is making headlines. have been affected by an attack on the IT system of the electronics retailer Conrad
Cyber Readiness Report: But when the security gap has been closed, as in this case, the work for IT and legal experts really begins. Customers must be informed and the full extent of the damage determined. The Cyber Readiness Report from Hiscox shows that this is not an isolated case.
The need for information in Germany is still high: even after increasing claims figures and media-recognized hacker attacks, many companies have not yet been convinced that cyber risks are relevant to them. This illustrates, among other things, the consistently high number of poorly prepared “cyber beginners” that the study identifies every year. (Cyber beginners in Germany according to the 2019 report: 70%; 2018: 77%) Now the results suggest that companies recognize the extent of the risk. The data is based on a survey of 5,392 companies from Germany, the USA, Great Britain, France, Spain, Belgium and the Netherlands. On behalf of the specialist insurer Hiscox, the market research institute Forrester Consulting interviewed company representatives about their experiences and how they deal with cyber attacks.
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The number of cyber attacks and the amount of damage are increasing dramatically
The results of the study make it clear that the frequency of cyber attacks continues to increase and the consequences of the attacks are becoming increasingly expensive for companies. 61% of the German companies surveyed were affected by at least one cyber attack in the past 12 months (2018 report: 48%). With a share of 30%, more companies also experienced four or even more attacks, while according to the 2018 report, 20% were attacked as often. One explanation for the increase could be the European General Data Protection Regulation, which came into force in 2018, as since then 84% of all European companies surveyed in the panel have invested more in measures to detect and report cyber incidents. The average cost per company from all cyber incidents suffered rose internationally from $229,000 (2018 report) to $369,000, an increase of 61%. Due to individual particularly high claims, affected German companies reported an average loss of a particularly high $906,000.
Networked supply chain as a gateway
Small and medium-sized companies in particular are increasingly feeling the effects of the increasing number of attacks. In all countries examined, 47% of small and 63% of medium-sized companies were victims of cyber attacks (2018 report: small companies: 33%; medium-sized companies: 36%). As companies become increasingly interconnected, cyber criminals are finding more potential gateways to get into third-party systems. The digitized supply chain in particular was the downfall of 65% of all affected companies and the attackers used connections to suppliers to gain access.
“The increase in claims and damage amounts does not surprise us. Of course, the dramatic increase can be partly explained by companies becoming more aware after the GDPR came into force. Today, more discovered damage cases are also reported. At the same time, the level of protection and prevention measures in many companies remains questionable. Cyber criminals can easily use this advantage for themselves. Decision-makers must realize that cybercrime is a real business risk in the digitalized world and not just a fad,” explains Robert Dietrich, Managing Director Germany of Hiscox SA.
Companies’ cyber self-confidence is declining
While companies' willingness to defend themselves has developed little, there is at least growing awareness of the lack of protection: since 2017, approval ratings have been falling with regard to how confident companies are about their strategy. For example, in the 2019 report, only 59% of international respondents said that their management has a clear idea of how cyber security needs to be managed. In the 2018 report, 61% agreed with this statement and in 2017 even 75% agreed. This development suggests that companies' level of knowledge about cyber risks has improved and that they no longer overestimate their defensive capabilities compared to previous years.
Too little cyber know-how on the company side
Measured by the criteria of strategy, resources, technology and processes, the vast majority (70%) of the German companies surveyed are still among the so-called cyber beginners. They are inadequately prepared in the event of a cyber attack. 19% are considered advanced and only 11% are cyber experts (2018 report: 77% beginners; 14% advanced; 10% experts).
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First improvements in dealing with digital risks
Although the vast majority of respondents are not experts, there are improvements in dealing with digital threats. More and more companies in Germany have an employee who is specifically responsible for cyber risks (Report 2019: 85%; 2018: 69%). In addition, more companies are reacting with concrete countermeasures if they have fallen victim to a cyber attack. Only 32% of the affected German companies stated that nothing had changed after an attack (2018 report: 45%). To cover their risks, 41% of study participants internationally have already taken out cyber insurance (2018 report: 33%), and 30% are planning to take out cyber insurance within the next 12 months (2018 report: 25%).
“In the networked business world, digital threats quickly become an obstacle to business. In order to make cyber risks calculable, every company must know their individual vulnerabilities. What is the most valuable data? What would be the worst case scenario if this data is lost or encrypted? No risk should prevent you from using new digital living, working spaces and business relationships without fear. Because future-proof insurance solutions are becoming part of the IT security concept in companies,” comments Robert Dietrich.
The Hiscox Cyber Readiness Report 2019 and further information about the study are available at www.hiscox.de/cyber-readiness-report-2019 .
Article image: Shutterstock / By rimom
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