Cyber attacks prompt insolvency fear for businesses

One in five businesses across eight countries said that a cyber attack almost rendered them insolvent, according to the latest cyber readiness report by Hiscox; 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 year before. It is in this context that over 87% of businesses across the world see cyber as the number one threat to their financial health, considering it an even greater threat than an economic downturn and skill shortages.

However, there is a disparity 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, while only 36% of companies which have not yet suffered an attack view the threat in the same way.

The sixth edition of the Hiscox cyber readiness report surveyed over 5,000 businesses in the US, UK, Belgium, France, Germany, Spain, the Netherlands and Ireland. Among the other key findings, it found that the median cost of attacks per company has increased by almost a third (29%) to just under US$17,000. Average cyber security spending per company is up 60% in the past year to US$5.3m, representing 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.
Gareth Wharton, Hiscox cyber CEO, said: “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 US$17,000, and for some of the worst hit businesses costs topped US$5m.”

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.

Wharton added: “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. 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.”

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