According to a survey of 2,718 executives from across 100 countries, cyber security incidents ranked as the biggest risk to businesses globally.
The survey was participated by CEOs, risk managers, brokers and insurance experts and 39% of them said cyber risks were the biggest fear for a business.
"Seven years ago, cyber ranked 15th on the business risk list, compiled by Allianz Global Corporate & Specialty (AGCS), with just 6% of respondents picking it."
Among cyber security issues, ransomwares got the most attention and seem to worry executives the most. They are increasing rapidly over the years and even after the encryption has been removed, businesses face extra cost (apart from the ransom cost) in the form of expensive litigation from consumers or investors who have been affected by data breach.
Mergers and acquisitions can also lead to security threats, as acquiring a company with poor cyber security measures can be liable for your company as well.
"Incidents are becoming more damaging, increasingly targeting large companies with sophisticated attacks and hefty extortion demands. Five years ago, a typical ransomware demand would have been in the tens of thousands of dollars. Now they can be in the millions," says Marek Stanislawski, deputy global head of cyber at AGCS.
Business Interruptions drops to second behind cyber security concerns. Interruptions can be caused due to fire, explosion or natural catastrophes to digital supply chain failures or political violence. Changes in legislation and regulation comes third , with tariffs, sanctions, Brexit and protectionism.
" Around 1,300 new trade barriers were implemented in 2019 alone, the report said."
Climate change ranked 7th biggest risk to business.
"If a digital platform is unavailable due to a technical glitch or cyber event, the losses for multiple companies reliant on it could be in the hundreds of millions of dollars or higher if they cannot provide services or products," the report said.
Cyber attacks was among the top three risks in countries like Austria, Belgium, France, India, South Africa, South Korea, Spain, Sweden, Switzerland, the UK and the US.
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