DIGITAL INTERACTIVE SERVICES
Shielding against potential cyber breaches lurking around the corner
Technology has piloted significant advancements in our lives making it simpler for us on so many levels. Such advancements had a flip side too, what with so many devices capturing endless data, so much so that we cannot call any aspect of our lives private anymore. From our search history and contact information to bank details and health records, we are now more exposed than ever. With this, the threat of being caught up in the ever-present scams and fraudulent activities multiplies.
Stepping up the game
According to a 2022 survey by the UK government on Cyber Security Breaches, 31% of businesses have experienced cyber-attacks of one kind or the other. When reality hit us hard in 2020, with the transition to work remotely, the security systems of most companies took a hit, with nearly 45% of companies suffering cyberattacks. Be it the data breach of Marriott International in 2020 that endangered the information of 5.2 million guests, or the mobile phishing case of Twitter when several high-profile accounts were hacked and later used to promote a bitcoin scam amounting to $1,00,000.
Such instances have forced organizations across the world to reevaluate their digital presence. The more digital an organization is, the more it’s vulnerable to cyber-attacks.
As per an article published by Fitch Ratings, the direct loss ratio of cyber policy in America rose to 73% in 2020. The loss ratio indicates the quantum of losses incurred by a company vis-a-vis the earned premium.All companies must safeguard themselves against any such potential losses stemming from cyber breaches. This calls for the setting up of a formidable IT infrastructure and robust employee training foundation, to be able to identify and evade a probable threat. A lack of awareness among the employees could create vulnerabilities for the whole organization. Data security safeguards must be laid down, along with best practices, such as password protection, system-based monitoring of spam emails, internet controls, and safe information sharing. This, while it requires a strong IT back-up, also mandates relevant training materials that are updated continuously, besides testing the imparted knowledge to ingrain the seeds of cyber safety in the DNA of employees. The IT infrastructure should also be built to record security audits and perform data back-ups at regular intervals. Another option available to companies is to safeguard against such threats with cyber insurance policies.
Cyber insurance to the rescue
Enforcing stringent cyber policies can shelter companies from various cyber-attacks, such as ransomware hacks, common Types of phishing attacks, malware attacks, and many more. Such policies can protect companies against any damage to networks or theft of third-party data. It acts as a recoupment mechanism to manage post-attack expenses, be it paying for security upgrades or repairing a firm’s tech infrastructure.
As per a report published by cybercrime magazine, the cyber insurance policy industry is expected to grow by $10.5 trillion annually by 2025. Cyber insurance premiums have been rising steadily every year on the back of this growing demand. The claims payout also saw an exponential rise in the US, at 73% in 2021, up from 25% in 2019. Insurers are evolving as well with this rapid growth in demand. Predicting claims before they trigger, analyzing market sentiment in advance to offer the best possible coverage, and hiring experts to evaluate risk profiles; it’s a whole nine-yard commitment.
Besides the cyberattack threat to companies, these policies also cover the individual risk of sharing personal data with external sources. People often tend to insure their vehicles and homes, but slack when it comes to protecting their own identity. A personal cyber policy can help in covering losses from fraudulent credit card charges, legal expenses, anti-virus software expenses, or reprogramming costs.
Cybersecurity hygiene is essential, be it for companies or individuals. Insurance companies are striving to bridge this gap. One of the leading brokers, Marsh, along with Microsoft, published a report – The State of Cyber Resilience – that showcases the low confidence company leadership has in their respective organization’s core competencies in cyber-risk management. On the other hand, insurance companies are setting minimum requirements and standards for cyber policy standards of companies, to impact a discipline. Cyber security hygiene follows a set of best practices to reduce the chances of cyber threats, starting from strong email passwords to using protected Wi-Fi or internet connection. Insurance companies are also stringent about choosing customers that have good control over cyber security standards.
In the hyper-digitized world of today, when all our information is vulnerable to online attacks, companies and individuals must explore all opportunities to safeguard themselves. Despite being more mindful about conserving our privacy, we could still be exposing our personal information with each access we grant to a multitude of apps on our devices. Ensuring privacy hygiene has become a necessity today if we want to step into a safer tomorrow.