The cybersecurity threat to the insurance and financial sector is massive, both in terms of potential losses and the cost of prevention. Here are some key estimates regarding the financial impact:
- Global Costs of Cybercrime: In 2023, the global cost of cybercrime was projected to reach $8 trillion annually, according to Cybersecurity Ventures. The financial and insurance sectors are prime targets for cyberattacks, given the sensitive financial data they manage.
- Financial Sector-Specific Losses: The financial services industry often experiences the highest average total cost per data breach. IBM’s 2023 "Cost of a Data Breach" report states that the financial sector incurred an average of $5.97 million per breach, compared to an overall global average of $4.45 million across industries.
- Insurance Claims for Cyberattacks: Cyber insurance claims have surged in recent years. In 2022, the global cyber insurance market was valued at around $9 billion. With the increasing frequency and severity of attacks, especially ransomware, the insurance payout costs are also rising dramatically.
- Business Losses and Downtime: In addition to direct costs, companies in the financial and insurance sectors face significant business interruption losses. The average cost of downtime due to a cyberattack in these sectors can range from $140,000 to over $1 million per hour, depending on the size of the organization and the complexity of the attack.
Given the lucrative nature of targeting financial and insurance companies, threat actors often demand larger ransomware payments, further inflating the potential dollar impact on this sector.
