Understanding worst-case scenarios crucial in cyber resilience strategy, data shows, suggesting $6tr global losses by 2021

A new research conducted by Cybersecurity Ventures suggests that the annual global cyber losses are expected to reach $6 trillion by 2021, with cyber security spending projected to exceed $1 trillion cumulative in the five years period leading up to 2021.

Re/insurance broker Aon, in its latest report ‘Prepare for the expected: Safeguarding value in the era of cyber risk’, has gathered views from cyber-focused leaders from businesses in EMEA to share lessons learned in building cyber resilient organisations.

Aon noted that cyber losses will affect businesses in the form of immediate crisis expenses, regulatory fines, which have increased following the implementation of General Data Protection Regulation, and lost revenue resulting from an attack stopping the business from trading or disrupting core operations.

While the immediate financial costs of a cyber attack can be crippling for a business, the report suggests that of equal or even greater concern is damage to a business’s reputation. According to Aon, cyber should be at the top of any C-suite agenda as cyber risk is not just an IT security issue, it is a threat to the whole enterprise.

"The reputational crisis resulting from an attack can erode a company’s market value, destroy brand loyalty, limit companies’ digital transformation efforts and even lead to a credit-rating downgrade," it said. "An effective cyber resilience strategy can help mitigate both immediate and long-term financial losses."

Onno Janssen, CEO, risk consulting and cyber solutions EMEA at Aon said: “Some companies still don’t fully understand the impact a cyber attack can have on a business. Understanding the worst-case scenarios and their impact to a business is crucial to developing an effective resilience strategy in which cyber is managed as an enterprise-wide risk across the entire organisation.

"The cyber threat is amorphous, and the technology it exploits is advancing at a dizzying pace, so the risk landscape is never going to stand still. The C-suite will have to aim to constantly improve its holistic cyber risk-management strategies to prevent, prepare for, and be able to respond to a cyber crisis. Ultimate responsibility for all risk management efforts resides in the boardroom.”

Get all the latest re/insurance industry news with our daily newsletter -  sign up here.

​Davies mulls North American expansion with large claims deal Expectation of lower-for-longer interest rates prompts cut in earnings estimates Tokio Marine Kiln shakes-up top leadership as CEO and CUO depart Gallagher hires sports broadcaster Jill Douglas for UK operations New insurtech using NLP and machine learning technology launches in the US

Feature:  10 ways insurers are using insurtech to drive new business