Cybercrime ranks third in dollar value as a global scourge leaving losses of close to $600 billion annually, or about 1% of global GDP a year, according to a joint Centre for Strategic and International Studies (CSIS) and McAfee report, making cyber risk re/insurance and mitigation more pertinent than ever as market demand snowballs.
At $600 billion and counting, the impact that cybercrime has on economies worldwide continues to grow significantly year on year, a 2014 study placed global losses at about $445 billion.
The report attributes the growth over the last three years to cybercriminals quickly adopting new technologies and the ease of cybercrime growing along with the expansion of black markets and digital currencies.
High end cybercriminals are as technologically sophisticated as the most advanced information technology (IT) companies, and, like them, have moved quickly to adopt cloud computing, artificial intelligence, Software-as-a-Service, and encryption, the report said.
Cybercrime impacts an estimated two-thirds of people online and over 2 billion people have had personal information compromised or stolen, making the need for cyber risk mitigation and reinsurance a global necessity and opening up tremendous opportunities for innovative re/insurers.
The CSIS centre warns that cybercriminals are growing in sophistication and quickly adopting new technologies; “an expanding number of cybercrime “centers” that now include Brazil, India, North Korea, and Vietnam. A growing financial sophistication among top-tier cybercriminals that, among other things, makes monetization easier.
“We expect further growth in cybercrime as hackers take advantage of poorly protected “internet of things” (IoT) devices that, while themselves not particularly valuable, provide new, easy approaches to steal personal information or gain access to valuable data or networks.”
There are presently more than about 6,000 online criminal marketplaces selling ransomware products and services, offering a range of over 45,000 products.
At least a quarter of the cost of cybercrime involves theft of intellectual property which can create risks to national security, the report found.
The rapid expansion and growth of cybercrime is an offshoot of the vast digital revolution that’s currently reshaping the way business, politics, security and law enforcement operate.
As firms transition to a digital asset and eco-platform based business model, cybercrime and cybercover and security have become one of the single greatest risks to the smooth functioning of governments, businesses and society, and thus present reinsurers with both the greatest challenge and the greatest opportunity.
