Russia’s foreign ministry recently issued a stern warning to Western nations to deter cyber-attacks on its critical infrastructure.
This was after several state-owned websites were hacked in the months following Russia’s invasion of Ukraine.
This, even though the Kremlin has been carrying out its own concerted cyberwarfare campaign for years, with the USA, Ukraine, and most recently Italy all suffering as a result.
Of course, these high-profile examples only underscore the growing threat of cyber-attacks on governments, businesses, and private individuals alike.
A successful breach can be costly for a company, (McAfee estimated global losses from cyber-crime at $1 trillion in 2020). That exorbitant figure will only escalate further in the years ahead.
Despite this, most businesses are still woefully underprepared to detect, prevent and mitigate the damage caused by a cyber-attack.
Addressing this growing problem will require companies to implement strict protocols, educate staff members, and ensure against the worst-case scenario.
Failure to do so will only fall prey to opportunistic hackers in a corporate world that’s becoming increasingly digitized.
Cybercrime spiraling out of control
The latest statistics on cybercrime do not make for pleasant reading.
According to Cybersecurity Ventures, global cybercrimes cost a total of $6 trillion last year – and the problem will only worsen.
With cybercrime expected to compound an annual growth rate (CAGR) of 15%, it could exceed $10 trillion as soon as 2025.
This is because the threat landscape is constantly evolving. With criminals dreaming up ever-more ingenious ways to access the information they crave.
Of course, big scandals such as the $4.4 million ransom paid by Colonial Pipeline or the even bigger sum of $40 million forked out by CFA Financial will dominate the headlines.
But the truth is that no business is safe from the attention of unscrupulous hackers.
Only 4% of 1,500 companies surveyed in the aforementioned McAfee report did not experience a cyber incident in 2019.
Small to medium businesses (SMBs) are particularly at threat due to the lower security standards they generally have in place.
In fact, the average economic fallout from a successful breach for a company of any size stood at $200,000.
And that’s a figure high enough to put most companies out of business, which is exactly what the statistics say. Sixty percent of SMBs which suffer a cyber-attack file for bankruptcy within the following six months.
For start-ups and other fledgling companies that don’t have adequate defenses in place, that’s a concerning figure.
Nevertheless, a recent survey shows a staggering two-thirds of CEOs believe they won’t be targeted. While 60% don’t plan to prevent an attack or deal with one if it does.
Businesses must be ready
Businesses simply cannot continue being unprepared for the risk of cybercrime.
One way to reduce the financial impact of an attack is by gaining adequate insurance protection against cyber risks.
While the cyber insurance sector is still nascent, it responds positively to heightened demand.
A report from leading provider Munich RE shows that global cyber insurance premiums estimate at $9.2 billion this year and could more than double in value by 2025 to $22 billion.
Of course, insurance companies were a target by hackers and threat actors, making them keenly aware of the risks involved.
For this reason, the reinsurance market – which covers the loss of primary insurers through diversified risk pools – also has a critical role to play.
The potential for growth in this sector was underlined late last year when Partner Re, the 12th largest reinsurer in the world and one of the main insurers against cyber risks which have conducted an annual review of this market segment for several years, was snapped up by French insurance giant Coveá for €8.6 billion.
As the deal was finalized, Covéa underlined that the acquisition is part of the firm’s plans to keep pace with evolving risks—as the insurance firm’s chief of staff emphasized, “climate change and cyber are global risks and to tackle them we have to rely on global players”.
Of course, having established cybersecurity protocols in place is a prerequisite for any company looking to access cyber insurance.
Acquiring coverage must go hand-in-hand with implementing robust cyber risk assessment measures and equipping staff to spot a threat at 50 paces – especially since 85% of data breaches involve a human element.
Governmental and state-sponsored tools are available even for smaller companies that cannot afford the admittedly prohibitive costs of top-notch cyber-security services.
Prevention and protection are key to survival for SMBs
There’s simply no excuse for any business that doesn’t heed the warning signs and protect itself against an increasingly organized, prolific, and powerful enemy.
The recent grandstanding by President Putin over disruption to his state infrastructure – even as he aggressively pursues a similar strategy in other nations – simply highlights the scale of the threat in today’s modern world, in which entire countries can become embroiled in cyber-crime machinations.
In the face of such a threat, it might seem like attempts to prevent or prepare for cyber-attacks are futile and extortionately expensive.
However, implementing simple but effective policies such as backing up files, using strong passwords, and steering clear of suspicious missives can work wonders in reducing the threat of the cyber-wolf at the door.
This proactive approach, backed up by robust insurance coverage in the event of an undesirable incident, is the way forward for large and small businesses in today’s brave new cyberworld.
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