Cyber crime costs global economy $445bn a year
Global losses from cyber crime have been estimated at $445bn (£291bn) a year, according to an insurer.
A report by Allianz Global Corporate & Specialty (AGCS) said the world’s largest 10 economies collectively accounted for half of these losses, totaling $250bn (£164bn).
They were: the US, China, Japan, Germany, France, the UK, Brazil, Russia, Italy and India.
In the UK, the cost of cyber crime was estimated at $4.3bn (£2.8bn), 0.16% of the country’s GDP of $2.7trn (£1.8trn).
The firm said over the past decade data breaches involving personal data had become a “major concern” for many organisations, both in the private and public sector.
Major corporations, governments and public services had been targeted by “hacktivists” – criminals using computer networks to promote a political agenda.
Chris Fischer Hirs, CEO at AGCS, said: “As recently as 15 years ago, cyber attacks were fairly rudimentary and typically the work of hacktivists, but with increasing interconnectivity, globalisation and the commercialisation of cyber crime there has been an explosion in both frequency and severity of cyber attacks.”
AGCS said increasing awareness of exposures and regulatory change would lead to “rapid growth” in cyber insurance. It predicted premiums for cyber insurance would grow globally from $2bn (£1.3bn) per year today to more than $20bn (£13bn) over the next 10 years, a compound annual growth rate of more than 20%.
Nigel Pearson, global head of fidelity at AGCS, said: “Growth in the US is already underway as data protection regulations help focus minds, while legislative developments and increasing levels of liability will see growth accelerate in the rest of the world.”
Meanwhile, a PwC report has said worldwide premiums in the cyber insurance market could grow to $5bn (£3.3bn) per year by 2018 and at least $7.5bn (£4.9bn) per year by the end of the decade.
PwC suggested insurers, reinsurers and brokers could capitalise on the cyber risk opportunity by maintaining their own cyber risk management credibility.
Paul Delbridge, insurance partner at PwC, said: “For insurers, cyber risk is in many ways a risk like no other. It is equally an opportunity. A more informed approach will enable insurers to reduce uncertain exposures while offering clients the types of coverage and attractive premium rates they are beginning to ask for.
“Insurers also need to continue to invest appropriately in their own cyber security – a business which can’t protect itself can’t expect policyholders to trust them to protect and advise them. Given the huge volume of medical, financial and other sensitive information they hold, it is critical that insurers have closely monitored, highly effective cyber security frameworks in place.”
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