Enterprises around the world need to be alert to a new era of cyber risks that set to cost the global economy hundreds of billions of dollars every year.
This is according to a new report from Allianz, which found that annual losses as a result of cyber crime total €445 billion a year, with half of this occurring in the world's ten largest economies.
The US was found to be the biggest target for criminals, with this nation incurring costs of $108 billion a year. This was followed by China ($60 billion), Germany ($59 billion) and Brazil ($7.7 billion).
Chief executive of Allianz Global Corporate and Specialty (AGCS) Chris Fischer Hirs commented: "As recently as 15 years ago, cyber-attacks were fairly rudimentary and typically the work of hacktivists, but with increasing interconnectivity, globalisation and the commercialisation of cyber-crime, there has been an explosion in both frequency and severity of cyber-attacks."
One factor behind the growth in cyber risks is the increasingly connected economy, driven by innovations such as the Internet of Things. The growing proliferation of internet-connected devices and sensors will open up new vulnerabilities that businesses will have to address.
Allianz noted that particular concern should be given to industrial control systems (ICS) used in sectors such as energy and manufacturing. Many systems in use today were designed before cyber security became a key priority, so could have weaknesses that more modern systems do not.
"An attack against an ICS could result in physical damage such as fire or explosion, as well as business interruption," the report stated.
Meanwhile, tougher data protection laws in many countries around the world should also spur many businesses to tighten their security solutions, under the threat of large penalties for breaches.
“Growth in the US is already underway as data protection regulations help focus minds, while legislative developments and increasing levels of liability will see growth accelerate in the rest of the world," said Nigel Pearson, who is globally responsible for cyber insurance at AGCS. "There is a general trend towards tougher data protection regimes, backed with the threat of significant fines in the event of a breach."