Hackers Don't Only Target Big Business
Barely a week goes by without news of a major cyber incident being reported, and the stakes have never been higher. Data theft has become commonplace; the scale of ransom demands has risen steadily; and cumulatively the environment in which businesses must operate is increasingly cyber hostile.
The cyber threat has now become the unavoidable cost of doing business today and more security and training should be undertaken by organisations of all sizes.
The new Hiscox Cyber Readiness Report 2019 explains that for the first time, a significant number of the firms surveyed, said they experienced one or more cyber-attacks recently in the last 12 months. Both the cost and frequency of attacks have increased markedly compared with a year ago, and where hackers formerly focused mainly on larger companies, small-and-medium -sized firms are now equally vulnerable.
Regulation is going some way to improving awareness and mandating a baseline of cyber security rigour.
In 2018, we saw the introduction of the EU’s General Data Protection Regulation (GDPR), to which businesses have adapted, and a by-product of this has been an uptick in demand for cyber insurance.
Significant Rise in Cyber-Attacks
The proportion of respondents reporting a cyber incident has risen from 45% last year to 61%, and the figures are higher in every category of breach.
Nearly a quarter of firms (24%) report a virus or worm infestation and 17% a ransomware attack. The number suffering a distributed denial-of-service (DDoS) attack is up from 10% to 15%.
The frequency of attacks has also increased markedly. Among firms that experienced cyber-attacks, the proportion reporting four or more incidents is up from 20% to 30%.
Small Business Attacks Have Increased
An increasing proportion of smaller firms are now caught up in the cyber battle. Small and medium sized firms are much more likely to have suffered multiple attacks this year, and on average the proportion of small and medium firms that have had an attack has increased 59%.
Bigger firms are more likely to have suffered repeat incidents. More than a fifth (21%) experienced five or more attacks in the year compared with an average of 16% for all respondents.
It is possible of course that larger businesses are simply better at spotting data breaches than smaller ones.
However, the implementation of GDPR last year has obliged larger firms, which stand to suffer big penalties for extensive breaches or failure to report an incident in a timely manner, to become more watchful and keener to report when incidents occur.
Cloud Risks
Many more respondents this year report problems with outages from third-party cloud providers (22%, up from 13%). Dutch firms were worst hit, with more than 27% of those that suffered cyber incidents reporting cloud outages, while across the respondent pool large and enterprise firms are more likely to suffer a cloud-related incident at 27% and 22% respectively.
This doubtless reflects the propensity for firms to push more of their data into the cloud as they grow.
Cyber Losses Increase
Businesses worldwide are suffering mounting losses from cyber-crime.
Of the 3,300 firms in our survey that suffered attacks, around 2,250 tracked the costs to their business.
Counting all incidents suffered over a 12-month period, the mean cost to those businesses rose from $229,000 to $369,000, an increase of 61%. Assuming a similar experience among those firms that failed to track or quantify the impact of cyber-attacks, the total cost for all 3,300 targeted firms was around $1.2 billion.
Adjusting for the increase in both the scale of the study group this year and the numbers targeted, that is more than double the cost registered in last year’s Report.
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