Cyber incidents and business interruption (BI) have been identified as the top business risks in the latest Allianz 2018 Annual Risk Barometer.
The survey was conducted on South African business but is in line with global sentiment, according to Julia Blain, senior account executive at JLT Marine.
“So-called “cyber hurricane” events where hackers disrupt large numbers of companies who have common internet infrastructure dependencies are increasing,” she points out. “We have all heard and seen news reports of massive leaks of personal and company information caused by cyberattacks. The malware attack on AP Moller-Maersk last year cost the company between $250m and $300m. And Maersk is not the only victim in the logistics industry. FedEx suffered a similar fate and allegedly lost a similar amount of income. WPP and TNT have also been targets of cybercrime – although the financial impact has yet to be disclosed.”
Apart from the reputational and financial damage, there’s a huge impact in terms of cost and disruption to the cargo owner. Blain says these risks need to be viewed in conjunction with the Protection of Personal Information Act (PoPI) which requires that businesses employ strict controls on how their clients’ personal information is stored and protected.
“Any breach or leaks of personal information are viewed sternly by the regulator and hefty fines and penalties will be levied against any company that fails to comply. The cost of compliance will no doubt increase as hacking becomes more and more sophisticated.”
JLT expects to see more and more businesses looking to their logistics operators to provide them with risk management solutions and mechanisms with which to mitigate these exposures.
“We expect to see increased pressure on logistics operators to assume greater and greater levels of risk. In order to secure business they will need to come up with the right solutions, the right resources and the right infrastructure for their customer’s base, while also turning a profit.”
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We expect to see increased pressure on logistics operators to assume greater levels of risk. – Julia Blain
