Cyber – The Real Risks – Are You Insured?

‘Tis the season to be jolly, however it is also imperative that you remain vigilant during the winter holiday season as this is when most cyber breaches/attacks occur.

As per the Allianz Risk barometer (2024), cyber risk is the most significant concern/risk facing UK business leaders today with claims severity up 140% for middle market businesses and claims frequency up 390% for the financial services sector

The use of AI is suspected to be a main contributor to the increase in ‘business email compromises (BEC)’ which is the most common type of attack, with an average loss of £20,000 per incident. These breaches alone account for 32% of reported incidents.

Unfortunately, for the other 48% of claimants of total cyber incidents, BEC wasn’t the end of it. BEC’s are a gateway for many bad actors and typically leads to more costly attacks:

1.Funds transfer fraud (FTF)

1. 1. Accounts for 27% of total reported incidents
   2. The average loss is £170,000

2.Ransomware attacks

1. 1. Accounts for 18% of total reported incidents
   2. The average ransomware demand in 2024 YTD is £1,000,000 with an average loss of *£268,000

*the average loss is down due to successful negotiations for businesses who have cyber policies

Such attacks can seriously impact your business functionality, and the subsequent potential financial losses could even lead to closure.

That’s why, here at Birchin Insurance Brokers, we have partnered with key markets to ensure that we are offering you the best-in-class programmes. Of course, paying claims is the number one job for any insurer, however Cyber insurers differ slightly as they are equally interested in providing you with risk prevention advice. Here are some general USP’s for cyber programmes:

1. Access to experienced ‘breach response teams’ who can find, fix, and recover data/systems following a breach
2. Directly handles negotiations with bad actors during ransomware events, using your company email/identity, to validate the threat and negotiate reductions
3. Cyber insurers have access to a lot of data which helps them to identify bad actors and determine the threat level and reliability
4. Cyber insurers operate globally, giving them access to vast networks and relationships with external agencies (e.g the CIA) and banks. This gives them a massive advantage when trying to recover funds which have been fraudulently transferred. Regardless of limit size, certain insurers will look to recover the total loss
5. Free copies of cyber health risk assessments which carries out an online search of your domain name to discover password breaches and to discover open ports etc. This report will provide advice and simple instructions on how to improve your cyber security which can be implemented by yourself or your external IT service provider
6. Apps that provide live tracking of cyber security, with notifications sent directly to you when there is an attempt, breach, or suspicious activity

If you would like that extra peace of mind this Christmas, please contact us for a free, non-intrusive, and no obligation quote for cyber insurance.

In addition, the first 100 enquiries will receive a free cyber health risk assessment which could cost up to £1,800 if carried out by an IT consultant.