US Businesses Strengthen Their Cyber Defenses, but Blind Spots Remain, Reveals Annual Hiscox Cyber Readiness Report

NEW YORK, June 22, 2020 /PRNewswire/ -- Hiscox, the international specialist insurer, revealed businesses are enhancing levels of spending and activity to minimize their vulnerability to cyber incidents and breaches. The annual Hiscox Cyber Readiness Report 2020, which gauges businesses' preparedness to combat cyber incidents and breaches, surveyed 5,569 professionals from the US, UK, Belgium, France, Germany, the Netherlands, Spain and Ireland who are responsible for their company's cyber security, between December 24, 2019, and February 3, 2020.

Key findings specific to the more than 1,000 US professionals surveyed include:

• A leader in cyber spending: The US shared the top spot for cyber spending, alongside Ireland. US businesses increased their average cyber security spending within their IT budgets by 61% to $2.4 million.

• More financial damage caused by fewer attacks: A battle has emerged between cyber criminals and businesses. In the US, only 41% of respondents reported that their organization experienced at least one cyber incident or breach compared to 53% last year, though the median cost of all cyber incidents in the US rose from $10,000 last year to $50,000 this year. Therefore, cyber criminals have been doing more damage in fewer, albeit more sophisticated, attacks.

• Businesses are taking action: Meanwhile, businesses are building up their defenses. While 39% of US organizations reported they did not take action after a security incident last year, this figure fell dramatically to 3% in this year's report. Actions taken include regularly evaluating and discussing security and privacy, increasing spending on employee training and cultural change and creating additional security and audit requirements.

• Improvement in cyber readiness, but potential blind spots remain: The number of ranked cyber experts more than doubled to 24% this year, while cyber novices fell to 58% compared to 73% last year. Despite this positive trend in cyber readiness, nearly half (48%) of all respondents agreed their organization remains at risk of having a cyber incident.

• Reputational impacts have increased: Fifteen percent of respondents that experienced a cyber incident or breach reported bad publicity or impact on their brand or reputation as a result, compared to 3% last year. Businesses also experienced greater difficulty in attracting new customers following an incident or breach, with 17% reporting challenges compared to 3% saying the same the year prior.

• US businesses are more likely to pay a ransom: Alongside France, the US led the way with businesses most likely to pay a cyber ransom, with nearly one in five (18%) of those US companies who suffered a ransomware infection reporting it had been paid.

• Small businesses remain vulnerable to risk: Nearly one-third (32%) of US small businesses, those with under 250 employees, experienced at least one cyber incident or breach in the past year. Of these, only one in five (21%) small businesses purchased or enhanced their cyber insurance policy for protection against threats.

• Mitigating the risk: Sixty-four percent of US businesses said they had cyber insurance coverage, while 16% said they were planning to purchase coverage in the next twelve months. Additionally, more than half (54%) of respondents with cyber insurance reported they planned to use "employee training" that's offered by their insurance providers in addition to their cyber policy.

"The financial threat cyber attacks pose to a company's bottom line is a risk that's here to stay, and one that grows, learns and adapts to the ever-changing world around us. Businesses are all vulnerable at their weakest moments, and a holistic cyber strategy can help identify those weaknesses before being forced into a real-time stress test," said Meghan Hannes, Cyber Product Head for Hiscox in the US. "Businesses have been pushed into an unforgiving new world in 2020, and cyber criminals won't offer any form of relief. COVID-19 has created new, lucrative opportunities for cyber attacks, and businesses must evolve their cyber strategies to remain shielded."

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The Hiscox Cyber Readiness Report 2020

About the Study

The countries covered (Belgium, France, Germany, the Netherlands, Spain, the UK and the US) have been extended this year to include Ireland. The number of respondents has increased from just under 5,400 companies to 5,569, reinforcing the position that the Hiscox Cyber Readiness Report is based on one of the broadest surveys of its kind.

There has been a rebalancing towards smaller companies, lifting the proportion with fewer than 250 employees from 56% to 60%. Firms with up to nine employees now account for 29% of the study group, compared with 20% the previous year. Sole traders make up 10% of the total, up from 5%. Large (with between 250 and 999 employees) and enterprise companies (1,000-plus) continue to make up a combined 40% of the study group.

Given the variation in the underlying figures between the smallest and largest companies, we have adopted median rather than mean figures for numbers of incidents, breaches and costs this year and restated prior-year figures in the same terms.

About The Hiscox Group

Hiscox is a global specialist insurer, headquartered in Bermuda and listed on the London Stock Exchange (LSE: HSX). Our ambition is to be a respected specialist insurer with a diverse portfolio by product and geography. We believe that building balance between catastrophe-exposed business and less volatile local specialty business gives us opportunities for profitable growth throughout the insurance cycle.

The Hiscox Group employs over 3,100 people in 14 countries, and has customers worldwide. Through the retail businesses in the UK, Europe, Asia and the USA, we offer a range of specialist insurance for professionals and business customers as well as homeowners. Internationally traded, bigger ticket business and reinsurance is underwritten through Hiscox London Market and Hiscox Re & ILS. In the US, Hiscox small business Insurance is underwritten by Hiscox Insurance Company Inc., a Chicago-based insurance company.

Our values define our business, with a focus on people, courage, ownership and integrity. We pride ourselves on being true to our word and our award-winning claims service is testament to that. For more information, visit www.hiscoxgroup.com.

The content provided above is provided for general informational purposes and is not intended, nor shall it be deemed, to be a solicitation of insurance with regard to any particular or specific person or entity.

Media Contacts

Lou Casale
Hiscox USA
+1 646 442 8341
[email protected]

Lucy Baines
Hiscox USA
+1 646 560 9399 
[email protected]  

SOURCE Hiscox

Related Links

https://www.hiscox.com