A pandemic of cyber attacks

The Covid-19 pandemic brought profound changes to the world — affecting not just health practices but also social, economic and behavioural patterns. With mounting concern, all markets were forced to adapt their procedures in addition to already accelerating digital transformation. The insurance segment, well-used to supporting customers’ needs on solid, secure foundations, now faced a number of new issues to tackle and demystify.  

Among the changes that brought swifter impact we would highlight the growth of remote work. As technology and digital processes quickly migrated to the cloud and daily corporate business went beyond company premises to spill into people's homes and devices, companies became easier targets for cybercriminals. Finding lowered barriers and flimsier security in home connections (compared to corporate ones), confidential information, customer data and financial transactions became easy targets for increasingly bold, specialist cyber attackers. 

Recently, the International Telecommunications Union (ITU) revealed that losses caused by cyber-crime around the globe have come to about $1 trillion USD in 2020 and $6 trillion in 2021. These numbers were corroborated by specialist periodicals such as Cybercrime Magazine, which forecasts an annual increase of 15% in cyber-attack-related loss until 2025, reaching a total of US $10.5 trillion worldwide. As for Brazil, a recent survey publicized by Época Negócios points out that our country has surpassed 9 million incidents and is the 5th priority target for cyber-crime in the world, behind the United States, United Kingdom, Germany, and South Africa.  

If we look at the fact, we’ll find more and more high-impact attacks involving multinational corporations. One of the more prominent cases affected JBS, the leading beef processor in the world. In May this year, the organization faced a large-scale cybernetic incursion which brought their operations to a halt in countries like Canada, Australia and the United Kingdom. This specific episode stoked fears of disruption to food supply chains and caused losses around US$ 11 million — the cost of systems recovery alone. More recently, in August, the retail corporation Grupo Lojas Renner S.A suffered a major blow that impacted their ecommerce systems, paralyzing their operations for days. 

Finally, another notorious incident related with global cyber-security disrupted the supply of fuel inputs in the United States. The attack on the network that controls one of the main American pipelines impacted the supply of gas and diesel directly, harming several industries including air, maritime and land transportation.   

Evidently, cyber-crime existed before the pandemic. However, an increasingly digitalized life has led to exponential risk exposure and the threat itself has gained visibility, fanned the flames of public discussion and made room for consolidating specific legislation such as Lei 14.155, of 2021, which establishes legal deterrents for cyber offenses.  

Faced with this widely publicized scenario, and considering people’s and corporations’ growing reliance on the Internet and technology as a whole, it is of mounting urgency to build more secure digital spaces. As we all know, cyber criminals keep up with evolving security technologies, so that companies which do not rely on specific insurance to cover threats of that nature may be fated to suffer irreversible damage to their finances, business and reputation. 

Attentive to the growing demand for security, insurers and brokers — MDS, for one — have specialized in management of this kind of threat and offer up-to-date, customizable coverage against cyber-crime. The assertiveness of cyber coverage derives from the combined factors of knowledgeable professionals and state-of-the-art technology, which makes it possible to map out pain points, identify risk and underwrite policies in line with each customer's needs. With more and more IOT, automation and AI solutions on offer, cyber risk will become a heightened, present concern in our lives, meaningfully altering the traditional perception of risk we’ve been operating under. It is up to the market to keep abreast of evolving circumstances, presenting companies with options that at least mitigate risk if elimination proves impossible. 

Business-wise, the insurance market feels very optimistic about the potential in this segment. According to a recent study by MarketsAndMarkets, the cyber insurance market could grow up to US$20.5B in premiums by 2025 — an annual growth rate of about 20%. Whoever comes out ahead by innovating, investing and learning from the segment, as always, will find themselves on blue waters.   

The fact is, both technology corporations and the global insurance market work to develop solutions that will provide their customers with the peace of mind they need to keep going, safeguarding their business, and their data, against this new "unseen threat”. At the end of the day, may "good” triumph in this battle against "evil”.

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