KnowBe4 report links cyber insurance to security needs

KnowBe4 has announced the release of a new research paper titled "Cyber Insurance and Security: Meeting the Rising Threat," exploring the intersection of cybersecurity and insurance and examining the threat landscape organizations face globally.

As businesses become increasingly dependent on digital infrastructure, adequate protection against cyber threats has become imperative. The report indicates that the average cost of a data breach rose to USD $4.88 million in 2024, with regional variations highlighting significant increases in claim severity and frequency in the United States, the Middle East, and Europe.

The research emphasises the growing relationship between cybersecurity measures and cyber insurance coverage and premiums. It underscores that insurers now expect robust security systems and notes how ongoing security awareness training can reduce an organisation's susceptibility to cyberattacks.

Among the notable findings, the paper reports that the costs associated with cyberattacks are escalating. Beyond immediate operational disruptions, affected organisations face legal fees, fines, and reputational damage. IBM has observed an increase in breach costs, underlining the necessity for effective risk management strategies.

The threat landscape is becoming more complex, with cyber threats ranking as the foremost concern globally. Social engineering and phishing attacks are prevalent, stressing the importance of bolstered human defences against these targeted threats.

Small and medium enterprises (SMEs) are particularly vulnerable, experiencing disproportionate effects from cyber incidents. Despite lower average costs, the financial impact can be severe, necessitating bespoke security approaches for these organisations.

The expansion of data privacy laws has led to a rise in class action lawsuits, particularly in the U.S., with potential for similar growth in Europe. This trend pushes organisations worldwide to focus on compliance endeavours.

The report highlights human factors as a significant vulnerability in cybersecurity, pointing out that they account for 75% of data breaches.

Stu Sjouwerman, CEO of KnowBe4, commented on these findings, "In today's interconnected world, the complexity and frequency of cyber threats are intensifying at an unprecedented rate. This latest research clearly indicates that organizations, regardless of size, must adopt a proactive and comprehensive approach to cybersecurity. Cybersecurity cannot remain an isolated IT function. Instead, it must be embraced as a core component of organizational strategy, ensuring that technological risk management is backed by informed human defenses and comprehensive risk management practices, including cyber insurance."

The research advocates for a multi-faceted cybersecurity approach that integrates advanced measures with adequate insurance coverage. It highlights preventative strategies, fostering a security-oriented culture, and promoting education, as well as encouraging strategic alliances between businesses, insurers, and cybersecurity experts, as crucial to addressing these challenges effectively.