With a significant increase in both the frequency and severity of cyber claims, Allianz Commercial’s Complex Claims handler, Mukondeleli Masiza, delivered crucial insights on cyber risk mitigation at the recent SNG Grant Thornton Cyber Security Awareness Summit.

In her presentation – Risk Transfer as a Tool in Cyber Risk Mitigation: Cushioning the Blow through Cyber Insurance – Masiza addressed the rising trends in cyber claims and effective strategies for mitigating cyber risks.

According to the Allianz Commercial Cyber Security Resilience Report for 2024, there has been a significant increase in both the frequency and severity of cyber claims. Large cyber claims, defined as those over €1-million, surged by 14% in the first half of 2024, while their severity escalated by 17%.

In her presentation, Masiza emphasised the importance of proactive measures such as early detection, swift action, and risk transfer solutions.

“Early detection minimises financial and reputational impact by allowing for quicker isolation of impacted systems and data,” she says. “Detection tools automate and expedite tasks such as forensics and notification, improving the overall crisis management process.”

Allianz Commercial’s findings indicate that organisations deploying cybersecurity AI and automation reduced the cost of a data breach by around $2-million on average.

“Robust incident response plans and regular drills ensure that teams are prepared,” continues Masiza. “Swift action following early detection can stop a cyber incident from escalating, facilitating faster recovery and restoration of normal operations.”

Masiza underscores the importance of cyber insurance: “Cyber insurance provides financial coverage for various costs associated with data breaches including IT forensic investigations, data recovery, and system restoration. Apart from the benefits of the cover provided, insurers can also offer valuable advice on loss prevention and mitigation – along with access to expert consultants and response teams.”

She further highlights the comprehensive support provided when an insured reports a cyber breach.

“Upon reporting a new incident, the Allianz Commercial claims team swiftly engages with the affected company to assess the situation and implement containment measures,” she says. “They coordinate with incident response teams including IT forensic experts, attorneys, and PR specialists as needed to conduct thorough investigations and provide the necessary support.”

Masiza provided an overview of underwriting considerations, advising that factors such as the company’s industry, size, risk profile, and existing cybersecurity measures are evaluated during the underwriting process. Important considerations include data governance standards, transparency regarding the use of consumer data, and cybersecurity measures within the supply chain.

She also offered guidance on securing cyber-related cover, emphasising the role of experienced brokers.

“Brokers play a vital role in explaining complex insurance terms, assessing specific business needs, tailoring policies, and conducting thorough risk assessments to identify potential vulnerabilities and recommend mitigation strategies,” she says. “Companies looking to secure cyber cover should enlist the services of an experienced broker with a history of placing this type of cover as it is quite specialised.”