The third Hiscox Cyber Readiness Report, which was published in April 2019, highlights the increased cyber risks that businesses are facing. The report, which drew data from seven countries (Belgium, France, Germany, the Netherlands, Spain, the United Kingdom, and the United States), noted the marked rise in both the amount of attacks and the overall costs stemming from cyber losses. Turning first to the increase in cyberattacks, 61 percent of respondents reported a cyber incident, up from 45 percent last year across the seven countries. Specifically, the percentage of U.S.-based firms reporting attacks rose from 38 percent to 53 percent. In addition, small firms and medium firms reported a large increase from 33 percent to 47 percent and 36 percent to 63 percent, respectively.
The report also revealed a significant increase (61 percent) in the mean costs resulting from cyber incidents over a 12-month period from $229,000 to $369,000. However, these numbers are skewed by the major losses suffered by German businesses. On the other hand, the mean costs of all incidents in the U.S. totaled $119,000.
There is cause for optimism, though, as the report notes a greater number of businesses are recognizing the importance of cyber security, developing action plans in the event of a cyber incident, and obtaining cyber insurance. At its core, this report only further underlines the value of businesses focusing on preventative measures and investing in appropriate insurance products. In light of the increased losses stemming from cyber losses, however, it remains to be seen if pricing in the insurance market will be affected.