Firms could be shocked at the cost of cyber attacks, such as yesterday’s Petya ransomware hack, with one of the City’s oldest financial institutions warning the reputational fallout is “what kills modern businesses”.
Lloyd’s of London said today businesses need to prepare themselves for “slow burn” costs that follow cyber attacks such as reputational damage, litigation and loss of competitive edge.
“The reputational fallout from a cyber breach is what kills modern businesses. And in a world where the threat from cyber-crime is when, not if, the idea of simply hoping it won’t happen to you, isn’t tenable,” said Lloyd’s of London chief executive Inga Beale.
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The insurance corporation has produced a report together with KPMG and law firm DAC Beachcroft that concluded ransomware, such as WannaCry or Petya, is a “rapidly increasing threat”.
The analysis follows yesterday’s massive cyber attack that hit a number of businesses in Ukraine and quickly spread across Europe, hitting the likes of advertising giant WPP, Danish shipping firm Maersk and Cadbury’s owner Mondelez.
KPMG cyber security director Matthew Martindale said while “cyber risk has moved up in the business agenda”, businesses “are failing to factor in the long-term damage that a breach can cause and the cost implications of it”.
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Businesses really need to start thinking about the cyber risk holistically rather than one that is currently very short sighted.
A number of London’s insurers have rapidly expanded their cyber insurance divisions with the likes of Lloyd’s stalwart Hiscox targeting considerable growth in the market.
Beale urged firms to “speak to experts who can help handle a breach, minimise reputational harm and arrange cyber insurance to ensure that the risks are adequately covered”.