Nigeria: Concerns of Cybercrime, Natural Disaster Worry Insurers

29 January 2020

Risks associated with cybercrimes topped the list of peril incidences that may likely hit the corporate world in 2020 and beyond.

But Nigerian insurance underwriters have said what they fear most this year is risk from climatic change especially flood risk and other natural disaster related risks.

Allianz global, disclosed this in its 2020 Risk Barometer publication.

The publication is an annual report that identifies top corporate risks for the next 12 months and beyond, based on the insight of more than 2,700 risk management experts from 102 countries and territories.

The report highlighted three major risks incidence that could befall corporate business and noted cybercrime incident as risk that have become more damaging and expensive for companies - and often result in lawsuits and litigation after the event.

It also stated that business interruption ranked second, but remains a key challenge with digitalisation and civil unrest creating new causes of disruption and loss of income

It further stated that said climate change rises to its highest-ever position, adding that companies are most concerned about physical losses from extreme weather events.

In terms of cybercrime, the report noted that it ranked top in the survey, for the first time after receiving 39 per cent of responses from more than 2,700 risk management experts in over 100 countries and territories.

"Seven years ago, cyber risk ranked only 15th with just six percent of responses. Awareness of the cyber threat has grown rapidly in recent years, driven by companies' increasing reliance on their data and IT systems and a number of high-profile incidents.

"Businesses face a growing number of cyber challenges including larger and more expensive data breaches, an increase in ransom ware and business email compromise (spoofing) incidents, as well as the prospect of litigation after an event. "Political differences between nation states being played out in cyber space brings added risk complexity, while even a successful merger or acquisition (M&A) can result in systems problems," the report stated.

While responding to what may likely be the top risks for 2020, the Chief Executive Officer of AGCS, Joachim Müller, was quoted in the report to have said: "The Allianz Risk Barometer 2020 highlights that cyber risk and climate change are two significant challenges that companies need to watch closely in the new decade.

"The risk of cyber incidents have become more damaging and expensive for companies and often result in lawsuits and litigation after the even

"In addition to being the top risk globally, cyber incidents are among the top three risks in many of the countries surveyed. In Austria, Belgium, France, India, South Africa, South Korea, Spain, Sweden, Switzerland, the UK and the US it also ranks as the top business risk."

"Businesses face the challenge of larger and more expensive data breaches, an increase in ransomware and spoofing incidents, as well as the prospect of privacy-driven fines or litigation after any event.

"A mega data breach, involving more than one million compromised records now costs on average $42 million, up eight per cent per cent year-on-year.

"Incidents are becoming more damaging, increasingly targeting large companies with sophisticated attacks and hefty extortion demands. Five years ago, a typical ransomware demand would have been in the tens of thousands of dollars. Now they can be in the millions," Deputy Global Head of Cyber, AGCS, Marek Stanislawski said

He said extortion demands were just one part of the picture, adding that companies could suffer major losses due to the unavailability of critical data, systems or technology, either through a technical glitch or cyber-attack.

He attributed many of the incidents to human error, but said it coul be mitigated by staff awareness training which are not yet a routine practice across companies.

He said business interruption ranked second, but remains a key challenge with digitalisation and civil unrest, creating new causes of disruption and loss of income.

According to him, climate change rises to its highest-ever position and companies are most concerned about physical losses from extreme weather events but also fear consumer criticism and increasing regulatory and legal action.

Meanwhile, a Nigerian insurer and Managing Director, Anchor Insurance, Mr Augustine Ebosa, has said various types of risks face businesses every year. But this year, he said what Nigerian insurers fear most is risk from natural disaster.

He said Nigerian insurers anticipate to pay huge claims from this, taking clue from what happened in the country and other countries last year.

See What Everyone is Watching

More From: This Day

Don't Miss

AllAfrica publishes around 800 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.