Forward-thinking insurers seek cyber security to manage risk amidst COVID-19

Cyber threats have exploded during the COVID-19 pandemic with recent statistics showing a
10-fold increase in attacks on digital networks in South Africa since President Cyril Ramaphosa declared a national state of disaster on March 15 2020.¹ Most attacks on companies are financially motivated, and with South Africa ranking 8th in the world in recipients of malicious emails in May 2020, cyber risk management should not be taken lightly.²

Charl Ueckermann, CEO at AVeS Cyber Security, says insurance providers are reaching out to IT security experts to tailor solutions that incorporate proactive cyber security tools to help lower the risk of attacks on their clients.

“Providing cyber insurance alone is not always enough. With internet-related theft and fraud increasing, cyber security interventions are a necessary part of risk management. The more proactive and predictive you are about managing cyber risks; the lower the client’s risk exposure will be, and the less likely they are to be attacked and carry the losses. It makes sense to incentivise policyholders to take appropriate actions to reduce cyber risks for themselves and the insurer. For policyholders, a lower risk profile translates into lower business insurance costs. So, it is a win-win situation.”

Lana Ross, Chief Operating Officer for commercial insurance at Discovery Insure, the frontrunner in incorporating cyber security as an integral part of its business insurance solutions, says “While cyber threats are not new, the sheer volume, complexity and cost of attacks are unprecedented. We are resolving this issue by offering enhanced solutions to help clients protect their businesses against increased cyber risk exposure. Qualifying clients get embedded cyber cover at no additional cost for 12 months. Clients who sign up between 1 July and 31 December 2020 can also get Kaspersky Security for Microsoft Office 365 at no additional cost for the first 6 months for all their computers. In addition, qualifying clients will get this security package at no additional cost for an extended period of 12 months for 5 users.”

“It is important for business insurance clients to have access to technologies that help them adapt to new ways of working because of the COVID-19 lockdown, as well as dedicated IT support services to help resolve IT issues quickly and avoid interruptions to their business. We give our clients access to digital services such online email and virtual conferencing apps to enable them to work from home. Clients can get access to these digital services at no additional cost for the first 6 months. They also get access to a dedicated IT support desk at no additional cost until 31 December 2020. These services are supported by our cyber security partner, AVeS Cyber Security, who are recognised experts in providing cyber security services to the insurance industry for over 22 years,” adds Ross.

Ueckermann adds that leading insurance brokers recognise the value of cyber insurance and the added benefits of including cyber security solutions as part of it.

“It is vital that brokers understand cyber security as an integral part of cyber insurance offerings. Insurance providers that offer cyber security benefits deliver a more holistic solution to protect their clients and lower their risk exposure.”

He concludes: “Cyber criminals are having a field day amidst the COVID-19 crisis. Phishing, ransomware, cyber theft and fraud are all on the rise. Insurance providers should look at the problem holistically and tackle the problem proactively by building in remediation through IT security products as well as cyber threat awareness for their clients.”

References:

1. Merwe, P. v. (2020, 03 25). unprecedented-spike-in-cyber-attacks-hits-sa-since-declaration-of-national-disaster. Retrieved from Businesslive: https://www.businesslive.co.za/bd/ national/2020-03-25-unprecedented-spike-in-cyber-attacks-hits-sa-since-declaration-of-national-disaster/
2. Goldstuck, A. (2020, 03 24). arthur-goldstuck-cyber-criminals-go-into-lockdown-too. Retrieved from Businesslive: https://www.businesslive.co.za/bt/opinion/2020-05-24-arthur-goldstuck-cyber-criminals-go-into-lockdown-too/

Additional data and references:

1. There has been a 10 fold increase in attacks on digital networks since 15 March 2020¹ and South Africa averages as many as 577 malware attacks per hour².
2. The cost of a single data breach for the average South African company is R50 million³
   https://www.businesslive.co.za/bd/national/2020-03-25-unprecedentedspike-in-cyber-attacks-hits-sa-sincedeclaration-of-national-disaster/
   https://www.businessinsider.co.za/sa-third-highest-number-of-cybercrime-victims-2020-6
   https://businesstech.co.za/news/enterprise/339763/the-average-cost-of-a-data-breach-in-south-africa/