Cyber risk for the first time in 2014 found its way on a top 10 list of global concerns, according to results of an Allianz survey of corporate insurance experts.
Greater recognition of cyber risk consequences at the board level helped cyber crime, IT failures and espionage crack the top 10 at No. 8.
The risk was No. 15 a year ago and wasn’t in the top 20 in 2012.
“I believe it is due to a heightened awareness of the risk and its potential consequences,” Nigel Pearson, global head of fidelity at Allianz Global Corporate & Specialty, told Advisen. “Threat of a potential cyber attack is now gaining greater recognition at board level.”
Cyber criminals have become more sophisticated and regulation has developed to make any failure to secure personal data and information “increasingly painful for companies” through higher fines and penalties.
Due to heightened media coverage, there is also a new awareness of the rapidly changing legal landscape, creating new areas of liability for companies in data protection and information security, Pearson said.
“It is no longer just the big organizations being attacked,” he added. “Cyber criminals are targeting all sectors and sizes of business, with cyber criminals now hacking into systems of SME firms as a way of ‘piggy-backing’ access to larger companies they partner with.”
Allianz said a data breach costs US companies an average of about $5.4 million—the most in the world.
Allianz’s third annual business Risk Barometer identifies companies’ most pressing concerns for 2014 via a survey of more than 400 corporate insurance experts in more than 30 countries.
The top four risks survey respondents identified as most pressing in 2014—business interruption and supply chain, natural catastrophes, fire/explosion, and change sin legislation and regulation—remained unchanged from 2013.
Rounding out the top 5 risks in 2014 was market stagnation or decline, which moved up three slots from 2013.
