The economic climate and cyber attacks remain high on the mind for respondents to WTW’s latest Directors’ Liability Survey Report.
The report, collated from answers from respondents across 40 countries, found that the five top risks to directors were said to be cyber-attack, data loss, cyber extortion, regulatory risk, and prosecuting arising from a health and safety or environmental regulations breach. However, the majority said that economic climate and cyber attacks were the most-significant risks.
James Cooper, partner at Clyde & Co., which conducted the survey with WTW, wrote: “It is, perhaps, no surprise respondents identified their top two risks to directors to be cyber-attacks and data loss, those having topped the list for the last three years. However, making a new entry is cyber extortion.”
He added: “The past year saw attacks evolve from attackers simply encrypting data to encryption and exfiltration, also known as double extortion and, further, into triple extortion, where the attackers seek to extract money from third parties related to the initial breach, such as customers. This is a worrying development and adds a further level of pressure on directors and officers to implement adequate cybersecurity controls and to react efficiently and effectively in the face of an attack.”
Of the top five risks to directors, cyber extortion was the only one to have risen in prominence in the last year, entering the top five for the first time. Cyber attack and data loss were both carried over from 2021, while regulatory risk and prosecutions arising from health and safety or environmental legislation fell somewhat. Employment claims were no longer listed as one of the top risks.
The survey found that concerns about the economic climate were lowest in the United Kingdom at 63%, but rose to 92% in Latin America. Likewise, only 53% of UK respondents were concerned about cyber attacks, compared to 79% in North America.
Jon Vocking, head of UK D&O at WTW, said that cyber criminals had become increasingly active due to the growing trend of working from home.
He wrote: “D&O underwriters are increasingly focusing on what necessary steps directors and officers have taken, and continue to take to protect their company’s digital assets and we are preparing our clients for this increased scrutiny.”
Interestingly, 48% of respondents in Asia said that Brexit was a concern, compared to a quarter of UK respondents, 5% of American respondents, 9% of European respondents, and 11% of Latin American respondents.