Magazine article Information Today

Cybersecurity Escalating Risk Factors

Magazine article Information Today

Cybersecurity Escalating Risk Factors

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special report

Cybersecurity made a big splash in a special report from Lloyd's of London. In the recent "Lloyd's Risk Index 2013," its third biennial study, Lloyd's surveyed 500-plus senior global business leaders who reported that cybersecurity is now the second-highest perceived risk for business leaders in the U.S. and Canada. In the previous Lloyd's Index in 2011, cybersecurity in North America was in the No. 4 spot.

"It seems too many businesses were underestimating its impact," says Marcus Alldrick, Lloyd's senior manager of information risk and protection. Lloyd's actually published a similar study in 2009 as part of a 360-degree risk initiative targeted to the C-suite senior management to explore an organization's risk on a global basis and where their priorities are rated in terms of preparedness.

Since the first study in 2009, the cyber landscape has definitely changed, says Alldrick. Information breaches were rated 16th in risk priority in 2009, and companies noted that they rated cyberattacks at No. 20. In 2011, malicious cyberattacks moved up to the No. 12 spot in risk priorities. The attacks were wide-ranging and very public as well, he says, with major cyber disruptions to Sony, WikiLeaks, Epsilon, and others. "We also saw the rise and prominence of hacktivism, especially with Anonymous," he says. And the very nature of the cyberattacks shifted from financial crimes to more ideological attacks.

The costs associated with cyberattacks are escalating as well. The most recent Lloyd's report highlighted a 2012 study from the Ponemon Institute that found that the average annualized cost of cyberattacks for 56 benchmarked organizations was $8.9 million in 2012, up from $8.4 million in the previous year. The most costly of the cyberattacks dealt with "malicious code, denial of service and web-based attacks," according to the Lloyd's report. …

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