Having cost shareholders billions in losses since 2013, cyber breaches can take a heavy toll. A recent study from IT consultant CGI and Oxford Economics found that cyber security breaches tend to permanently impact a company’s share prices. High-profile cyber security breaches that result in legal or regulatory consequences in particular tend to hurt a company’s brand. According to the report, these types of consequences caused share prices to fall nearly 2% on a permanent basis. Companies in the financial industry experience the most consequences from a cyber breach likely because they are heavily regulated, and heavily targeted by hackers. Consumer confidence also dips whenever a financial institution experiences a data breach due to the understandable fear of financial fraud.
The study also found that FTSE 100 firms suffered a $52.4 billion loss in total due to cyber breaches. Typically each firm would lose $153 million. Large businesses are more likely to be targeted by cyber attackers, but that doesn’t mean SMEs should forego cyber security. The British Chambers of Commerce found that one in five businesses in the UK has been hit by at least one cyberattack in the past 12 months. Small businesses are still too slow to recognize that they should prioritize cyber security. In the UK, 18% of companies with fewer than 100 employees were hit with a cyberattack despite their small size.
In addition, the Ponemon Institute’s 2016 Cost of a Data Breach estimates that the consolidated cost of the average data breach is $4 million, and every compromised record costs the company $158. For larger companies, this small number can amount to millions in losses.
Cyber insurance is an industry that is just beginning to take off, as companies are realizing that their data is just as valuable as other assets. In 2015, 120 insurance groups offered cyber coverage, according to a report from Fitch Ratings. The cyber insurance market has been growing about 40% per year for the past three years. The market is expected to grow as companies look to protect themselves financially from hackers. By 2020, it is estimated that the cyber insurance market will reach $20 billion.
Along with purchasing cyber insurance, companies can protect their confidential information by using endpoint security software. Below are three benefits that endpoint security software can provide:
While cyber insurance can keep companies and shareholders insulated from the financial consequences of a data breach, endpoint security software can help companies block malware and other threats. With cyber threat detection, companies can prevent a cyber breach from occurring, and in turn, save shareholders from permanent losses.