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New Research Examines Cyber Threats and Costs to Industry Sectors

Cyber Hacking-SF
July 03, 2017

Captive insureds and insurers looking to understand the evolving cyber threat landscape and its full costs will find insights from a recent Lloyd's report titled Closing the Gap—Insuring Your Business against Evolving Cyber Threats. 

Lloyd's, in association with KPMG and legal firm DAC Beachcroft, looks at the nature of cyber threats currently faced by companies and examines the top threats by industry sector. The report also dives into the full financial impacts of data breaches and provides case study examples of some more recent high-profile attacks. 

KPMG analysis lends clarity to the perplexing sea of cyber attacks by categorizing them into three main categories: commoditized, targeted, and high-end. The report succinctly reviews various aspects of each and reviews common tactics used by attackers.

The report assesses cyber threats faced by industry sectors relative to frequency of being targeted for attack and also provides case study examples for each of the following sectors: education, financial services, health care, hospitality, information technology, manufacturing, media and entertainment, oil and gas, professional services, public, retail, telecommunications, transportation, and utilities.

The research identifies ransomware—such as the WannaCry worldwide ransomware attack last month—as a rapidly increasing threat, together with distributed denial-of-service attacks and CEO fraud. The analysis also highlights that financial services firms are the most targeted by organized cyber crime, but that retail is also increasingly being targeted.

As businesses increasingly become the target of sophisticated hacking attacks, Lloyd's warns them that they need to properly prepare themselves or face a hefty bill, including "slow burn" costs such as reputational damage, litigation, and loss of competitive edge.

Lloyd's identifies the report's key findings as follows.

  • Ransomware and distributed denial-of-service attacks are increasingly used against businesses, with health care and media and entertainment particularly targeted. For example, Beazley, a Lloyd's underwriter, has seen a fourfold increase in ransomware attacks on its customers from 2014 to 2016. It predicts the number of attacks will double again this year.
  • The financial services sector finds itself at the sharp end of targeted attacks by organized cyber crime, but retail is increasingly being targeted. Criminals are becoming more financially savvy and have started to target bank systems and financial infrastructure.
  • Oil and gas firms can find themselves caught up in national politics and can be the subject of espionage as well as occasional high-end disruptive attacks; they essentially become political cyber footballs.
  • The public sector and telecommunications sectors are highly susceptible to espionage-focused cyber attacks.
  • There has been a major growth in targeting companies through CEO fraud (i.e., perpetrators posing as a senior executive to elicit sensitive information). This is resulting in significant financial losses.

The full report is available online.

For more on this topic, view the following articles: "Systemic Cyber Attacks Likely in 2017, According to AIG Cyber Risk Study," "More Than a Quarter of US Firms Not Planning To Buy Cyber Insurance," "Ransomware Attacks Quadrupled in 2016 and Are Expected To Double in 2017," "Cyber Crime in Switzerland: Sharp Upturn with New Threats," and "Tailored Cyber Liability Coverage Forms Are More Efficient and Effective."

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