A cyber protection is not enough

We live in a more and more digital world. The coronavirus crisis has accelerated this trend. New technologies mean also new risks. Insuring your business is necessary. Did you know that digital risks are not just related to cyber incidents? Better to have good fraud coverage as well.

The global cost of cybercrime damage reaches USD1 trillion in 2020. In only two years, the economic impact of cyber incidents has increased by 50%, representing over 1% of global GDP now. According to the latest Allianz Risk Barometer  (2021), cyber incidents rank the third place of risks that companies fear the most for the moment. Due to Covid-19, business disruptions and the pandemic arrive on place 1 and 2.

Cyber incident vs. digital fraud

Cyber insurance is currently very popular with businesses. However, this type of insurance does not provide sufficient protection. Not every type of digital fraud is a cyber incident. For a cyber policy to take effect, an intrusion into IT systems must have taken place. Think of data theft, system hacking or a computer virus. This is not the case with phishing or fraud via e-mail. In that case, malicious people – although through digital channels – defraud your employees.

Unfortunately, this type of digital fraud is much more prevalent than you might imagine. The Belgian federal police recorded an increase of more than 30% in digital fraud cases last year. According to a study by Euler Hermes France, more than 7 in 10 companies were victims of at least one fraud attempt in 2019. The most common form of fraud is identity theft: supplier or customer fraud as well as CEO fraud. CEO fraud means that the fraudster poses as a high-level representative of your company (CEO, CFO, etc.) and forces your employees to make a payment or reveal sensitive information. The urgent and extremely well prepared request of fraudsters over the phone or via email often conflicts with existing security procedures.

Therefore, fraud insurance should be seriously taken into consideration to complete the insufficient cyber coverage. This is the essential way to ensure the best protection for your business. It is important that your insurance policy cover a wide range of circumstances.

Prevention and processes

A fraud insurance with adequate cover is not the only defense against digital fraud. At least as important is prevention. As a company, you can do a lot yourself to reduce the chance of fraud and to limit its consequences. Think of strict financial controls and verification processes at various levels. The use of dedicated tools to better manage your risks also works well to prevent fraud. Training your employees is such a powerful prevention tool. Bring them the necessary vigilance so that they recognize the signals of suspicious money transfers in good time.

Protect yourself with comprehensive insurance

Euler Hermes (Allianz) is one of the fraud insurers with the longest track record in Europe. We offer you the most complete insurance on the market: it covers internal and external fraud as well as certain cyber risks. We protect your assets and cover your losses caused by fraud, such as financial loss, misappropriation of property, damage to systems and reputational damage.