Jim Armitage: With thousands of hacks a day, it’s time for business to get cyber attack insurance

JIM ARMITAGE
Giants WPP, Reckitt and the NHS have all been hit in the past year: ROB ENGELAAR/AFP/Getty

It’s right to be suspicious of insurance companies giving us the heebie-jeebies about looming disasters: fear is the industry’s biggest marketing tool.

But research from Hiscox today does give cause for alarm. Just out of interest, it set up three servers to copy the type of computer system you’d find in a small business. The point was to see how many times it got attacked by hackers — a hacker’s honeypot, if you like. Guess how many attacks it had: a dozen? A hundred? Not quite. Try 23,000. A day.

If you’re lucky, your anti-virus software will keep most of these attempts at bay, but the hackers are getting cleverer by the minute at spotting loopholes.

It’s nothing new that your business can get crippled by hackers — WPP, Reckitt, the NHS, have all been hit in the past year.

But, as Hiscox reports, the stakes are about to get a whole lot higher. Soon, the new GDPR rules on data protection come in, which will see companies fined up to 4% of sales if customer data is mishandled.

Although the fines are primarily intended to stop companies deliberately sharing customers’ details without their permission, businesses are also liable if that data gets shared by hackers.

Suddenly, cybercrime gets a whole lot costlier. Yet Hiscox research into 4000 organisations in five countries found 73% had major shortcomings in their cyber security. And that despite nearly half having suffered at least one major attack in the past year. The cost of such attacks in repairs and lost business: $229,000 per hack.

GDPR arrives in May. Time to heed the insurers’ warnings.

Bad news story

Last time Trinity Mirror came close to buying Richard Desmond’s newspapers, he told them to “Fox off”. Softly, softly, catchee monkey Simon Fox, the consolidator of UK newspapers, has reeled him in. And for a price broker Peel Hunt describes as “very modest”.

Even including the cash injection for the pension, the £184 million deal price is only five times Desmond’s papers’ profit. And £59 million of his cash is in payments over five years. Plus, Desmond has to take £20 million in Mirror shares. He has secured a promise his old papers will continue as tenants in his Lower Thames Street HQ, but this deal is not a Desmond bonanza.

Fox predicts £20 million of savings. This, he says, is mainly from back-office work but, given how tightly Desmond runs his ships, journalists will have to be axed to make the sums add up.

It’s not just about cuts, Fox says. Advertisers will welcome having a bigger audience. Maybe so. But Desmond has been a brilliant trader all his life. The fact he’s selling on these terms says a lot. And it’s not good news.

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