In the light of recent cyberattacks on UAE corporate houses, including an attack claimed by a group styling itself as the ‘Mysterious Team Bangladesh’, the importance of cyber insurance as part of a comprehensive risk management framework has come into even sharper focus.
Cyber threats are increasing in sophistication and frequency, putting considerable pressure on organizations in the UAE to rethink their approach to cybersecurity.
From distributed denial of service (DDoS) attacks on banks to phishing attacks affecting 80 per cent of businesses, it is clear that entities in the UAE are becoming a growing target for cybercriminals. This rise in cyber threats underscores the importance of incorporating cyber insurance into risk management strategies.
Why cyber insurance?
This would offer organizations financial protection against losses resulting from cyberattacks and data breaches. These losses can be substantial, particularly in sectors such as banking that handle significant volumes of sensitive data. In the event of a cyberattack, insurance can cover expenses related to investigation, data recovery, legal liability, and customer notification, among others.
Additionally, insurance policies often provide access to specialized cyber incident response teams, helping the organization recover swiftly and effectively.
A recent study revealed that 44 per cent of companies in the UAE that fell victim to at least one successful attack experienced direct financial losses. Over 72 per cent of organizations have suffered data loss due to internal actions. Given these stats, it’s clear that the financial burden of a cyberattack can be devastating, further highlighting the value of cyber insurance.
Part of risk management framework
Cyber insurance should not be seen as a replacement for cybersecurity measures, but rather as a complementary part of a broader risk management framework. This approach includes measures to identify, prevent, detect, and respond to cyber threats.
Even organizations with advanced cybersecurity measures in place are not immune to attacks. In these situations, cyber insurance can provide a much-needed safety net, helping to absorb the financial and operational impact of the attack.
As the frequency and severity of cyberattacks continue to rise, businesses in the UAE must recognize the value of cyber insurance. It provides a vital layer of financial protection and for organizations in the UAE, especially those in the financial sector, investing in a comprehensive cyber insurance policy has become an indispensable part of managing their risks.