Severe cyberattacks such as the recent ‘WannaCry’ ransomware attack that hit the National Health Service (NHS) in the UK and Spanish telecom firm Telefonica are expected to occur more frequently, exposing protection gaps in the global economy, according to insurance experts.
The ransomware attack affected computers all over the world, encrypting files on thousands of computers via malware that effectively shut them down unless their owners paid a ransom for a decryption key. The attack forced the shutdown of manufacturers, hospitals, shops and schools.
The attack highlighted the need for cyber insurance cover, something that is comparatively well developed in the US insurance market, but has less take-up elsewhere.
“Cyber is a relatively new type of insurance cover, penetration into the public sector is likely to be low,” specialist insurer Beazley said in a statement on the cyberattack. Public sector organisations have historically under-invested in technology and security, the firm added.
According to Beazley ransomware attacks are very difficult to defend against, with backups of computers and file systems being the only defence.
“The main costs of such an attack are business interruption, costs of recovering from backups,” the insurer noted.
The industrial-scale global cyber-attacks with 200,000 victims across 150 nations including the NHS and the Russian Federation’s Interior Ministry were no freak coincidence, said risk management software and services company Russell Group.
“Organisations need to boost their software upgrades to bolster defences against such risks, while governments need to accelerate the process of regulation in an increasingly vulnerable connected world,” said Russell Group managing director Suki Basi.
A recent study by US insurer AIG showed that nine in 10 global cyber security and risk experts believe that cyber risk is systemic.
Industries most likely to face a systemic attack in 2017 include: financial services (19 percent), power/energy (15 percent), telecommunications/utilities (14 percent), healthcare (13 percent) and information technology (12 percent).
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Cyber, Cyber-attack, Ransomware, NHS, Telefonica, Beazley, Aon, Russel Group, Clyde & Co, UK, Europe, Global