The vast majority of risk professionals believe the overall level of cyberattacks will spike as a result of COVID-19, according to a new study by Willis Re, the reinsurance division of Willis Towers Watson.
Willis Re’s 2020 Cyber Risk Outlook survey found that 86% of respondents believed the frequency of cyberattacks will increase, while 54% believe that the severity will increase. The respondents, a selection of the risk management, claims, underwriting, legal, broking and analytics sectors in 56 countries, believe that the cause of losses will be divided almost evenly between data breach, ransomware and business interruption, Willis Re said.
About 32% of respondents said that business interruption was the most likely source of loss, up from 10% before the pandemic. Data breach fell from its prior spot as the anticipated leading cause of loss, from 53% to 33% of respondents.
“The forecast rise in post-COVID-19 losses may be a result of the sudden, wide-scale transition to remote working, since the shift has increased the cyber vulnerability of many businesses,” Willis Re said.
Expectation of a catastrophic cyber event – one leading to claims of $10 billion or more – has also increased since the pandemic. Prior to COVID-19, only 13% of respondents said that such an event was likely during the next five years. In the most recent survey, a third of respondents said they believed that a loss in excess of $10 billion was at least a five-year event. Concern was even higher in the Asia-Pacific region, where half of respondents saw that potential frequency for catastrophic cyber events.
“This year’s survey shows quite clearly that risk professionals around the world believe that the pandemic has increased cyber risk, in some cases dramatically,” said Mark Synnott, global cyber practice leader for Willis Re. “They expect the insurance industry to respond, but unfortunately not in the way we might hope. While three quarters of the people we surveyed think demand for cyber cover will increase post-COVID-19, only 45% think supply will increase, which perhaps explains why three-quarters think the cost of cover will rise. The insurance industry has some work to do to ensure these expectations are not met.”