Mitigating the potential business risk of cybercrime

The new Insurance Barometer Report by Santam, the country’s largest short-term insurer, has revealed how the pandemic and systemic risks have impacted the economy and insurance industry.

The survey shows that most organisations feel optimistic about the future, despite the pandemic’s devastating effect on both lives and livelihoods. Here are some key insights from the report.

The importance of cyber cover for the “new normal”

Many organisations invested in technology to move to a work-from-home model, although there has been no significant rise in cyber-related cover.

“The cost of third-party liability and fines following a major data breach can easily run into millions of rands. Additionally, loss or damage to digital assets is often not covered by standard insurance solutions.” - Fanus Coetzee, Head of Claims Adjustment Services

According to the report, 45% of commercial intermediaries rank cybercrime as their third highest risk while 36% of corporate and commercial entities see it as their fourth biggest risk over the next two years. Intermediaries and risk advisors will play a vital role as they mitigate these potential risks for organisations of all sizes, since simple measures such as updated anti-virus software and educated employees will help prevent major cyber-attacks.

Other high-ranking risks businesses face

Apart from cybercrime, intermediaries and commercial entities surveyed also ranked these risks in the Insurance Barometer: 

• Fire
• Theft
• Economic downturn
• Motor vehicles
• Business interruption
• Public liability

The pandemic has caused a drop in insurance claims for vehicles, as well as fire claims due to unoccupied office buildings. The Insurance Barometer encourages business leaders to review their risk exposure regularly, and to ensure they have cover for less obvious risks such as cybercrime.

The report also highlighted proactive measures to minimise the risk of fire and damage, such as tidy wiring, uncluttered workspaces, and regular maintenance of equipment and electricity boards

Want more insights from the Santam Insurance Barometer Report, visit the website.