The conventional wisdom 20 years ago, before the Internet took over the business world, was that only about 10% of cyber crime was reported since companies did not want to admit they had been hacked. Obviously the current Internet business environment makes it almost impossible to keep cyber hacks from the public.
Recent estimates are that “the cost of cyber crime to businesses worldwide range from around US$445 billion (£291 billion) to US$2 trillion a year (£1.3 billion)” according to a February 2, 2015 report from ITProPortal entitled “Here’s why the cyber insurance industry is worth £55.6 billion” which included current estimates:
…merely the tip of a vast unreported mountain of cybercrime that has been growing over the last few years.”
Maybe the $2+ trillion estimate is more realistic than the estimated $575 Billion in cyber crime from the Center for Strategic and International Studies and McAfee issued their June 2014 report entitled “Net Losses: Estimating the Global Cost of Cybercrime” with these comments about the impact on the world:
- The cost of cybercrime will continue to increase as more business functions move online and as more companies and consumers around the world connect to the Internet.
- Losses from the theft of intellectual property will also increase as acquiring countries improve their ability to make use of it to manufacture competing goods.
- Cybercrime is a tax on innovation and slows the pace of global innovation by reducing the rate of return to innovators and investors.
- Governments need to begin serious, systematic effort to collect and publish data on cybercrime to help countries and companies make better choices about risk and policy.
Clearly cyber crime will never be smaller, so businesses need to be more cognizant of their risks and carry the appropriate cyber insurance.