Threat of insolvency is a real threat given increased frequency and severity of attacks
One in five (20%) of businesses across eight countries said that a cyber attack almost rendered them insolvent – according to the latest Hiscox Cyber Readiness Report; an increase of almost a quarter (24%) compared to the previous year.
The frequency of cyber attacks increased by 12% year-on-year – with 48% of businesses saying they suffered a cyber attack in the past 12 months, compared to 43% in the prior year.
It is no surprise then that over 87% of businesses across the world see cyber as the number one threat to their financial health, and view it as more of a threat than an economic downturn and skill shortages.
There is a huge gulf in perception between those who have actually suffered an attack and those who have not.
More than half of cyber attack victims (55%) see cyber as an area of high risk; whereas amongst companies which have not yet suffered an attack, the figure is just 36%.
Gareth Wharton, Hiscox Cyber CEO, commented: “Business owners will have spent years growing and investing in their business, but one cyber attack could reduce what they have built to financial rubble.
”The threat of insolvency for many is very real given the increasing costs of an attack – the median cost of an attack has risen sharply by nearly a third to just under $17,000, and for some of the worst hit businesses costs topped $5m.
Remote working increases vulnerabilities
Now in its sixth year, the Hiscox Cyber Readiness Report surveyed over 5,000 businesses in the US, UK, Belgium, France, Germany, Spain, the Netherlands and Ireland. The report’s other key findings include:
- Cyber criminals are using speed and sophisticated means to identify vulnerabilities in businesses’ networks, which is driving a 29% increase in the median cost of attacks per company to just under $17,000.
- More than three out of five respondents (62%) agree that their business was more vulnerable to an attack as a result of employees working from home. This rose to 69% in companies who employed more than 250 people.
- Average cyber security spending per company is up 60% in the past year to $5.3 million; an increase of 250% since 2019.
- Adoption of cyber insurance is highest in the financial services industry, where 74% of companies have cover either through a standalone policy or as part of a wider insurance policy.
“Remote working is not going away, and has impacted the volume of cyber attacks as cyber criminals gain access via cloud servers, so it is vital that businesses take the necessary steps to protect themselves against the complexity and speed of cyber attacks,” added Wharton.
”In particular, the success cyber criminals continue to have in breaching systems via the use of phishing emails means one of the most effective defences a business can have is continuing to raise staff awareness of the risks.”