Economy
Data Privacy Breach Incidents Trigger Rise in Cyber Insurance Claims
By Modupe Gbadeyanka
An arm of a global insurance firm, Allianz Group, Allianz Commercial, has revealed that cyber insurance claims are beginning to rise as a result of an increase in data and privacy breach incidents.
It, therefore, called on insurers to step up their focus on the data privacy side of cyber risk and offer loss prevention and mitigation advice to businesses.
In its annual cyber risk outlook, the firm said the frequency of large cyber claims in the first six months of 2024 was up 14 per cent while severity increased by 17 per cent, with data and privacy breach-related elements present in two-thirds of these large losses.
In the report, the Global Head of Cyber Claims at Allianz Commercial, Mr Michael Daum, pointed out that, “The growing significance of data breach losses among cyber insurance claims is driven by a number of notable trends.”
“A rise in ransomware attacks including data exfiltration is a consequence of changing attacker tactics and the growing interdependencies between organizations sharing ever more volumes of personal records.
“At the same time, the evolving regulatory and legal environment has brought an uptick in so-called ‘non-attack’ data privacy-related class action litigation, resulting from incidents such as wrongful collection and processing of personal data – the share of these claims has tripled in value in two years alone,” he added.
“We are seeing more data privacy breach claims in the US where there is a growing trend for class action litigation against large US and international corporations related to privacy violations, such as around consent and data usage,” Mr Daum further said, adding that, “The cost of some of these claims can be even larger than a ransomware incident, in the hundreds of millions of dollars.”
Over the last year, in particular, data breaches have emerged as one of the fastest-growing areas of US class action litigation. Over 1,300 were filed across a wide range of data privacy regulations in 2023, more than double the number filed in 2022 and four times that filed in 2021, according to law firm Duane Morris.
Multiple class action lawsuits have been launched against organizations across a wide range of industries, including healthcare, social media, and gaming, for using tracking tools such as Meta Pixel to monitor consumer behaviour, while entertainment streaming platforms have also been targeted, alleging that they may have violated privacy protection rights.
In addition, the risk of data breach litigation is also growing in Europe. Heightened awareness of data protection rights, a rise in the availability of third-party litigation funding, and a more consumer-friendly litigation environment could make mass data privacy claims a reality, albeit not on the same scale as the US, the report noted.
It was observed that despite a general trend for increased investment in cyber security in recent years, many data breaches, including some of the largest mass data exfiltration cyber-attacks over the past 18 months, are the result of weak cyber security within organizations and/or their supply chains.
Such incidents can lead to a large claim involving regulatory fines, notification costs and third-party litigation, in addition to extortion demands, first-party costs and business interruption.
“The insurance industry must also step up its focus on the data privacy side of cyber risk and has a key role to play in offering loss prevention and mitigation advice to businesses about this increasingly important area of exposure,” the Global Head of Cyber and Financial Lines at Allianz Commercial, Ms Vanessa Maxwell, submitted.
“The value of cyber insurance goes well beyond the payment of claims. Insurance helps companies make the business case for cyber security investment and to direct their resources towards the most effective measures,” she said.
On his part, the Global Head of Cyber Risk Consulting at Allianz Commercial, Mr Rishi Baviskar, posited that “Early detection and response capabilities are also key. Around two-thirds of breaches are typically reported by a third party or by the attackers themselves.”
“Cyber breaches that are not detected and contained early can end up being 1,000 times more expensive than those that are, the difference between a €20,000 loss turning into a €20 million one.
“AI is also becoming an essential tool in the fight against cyber-attacks, as it can quickly identify a security breach and automatically isolate systems and databases, as well as having the potential to significantly reduce the cost and life cycle of a data breach claim by automating tasks, such as forensics and notifications, potentially saving companies millions of dollars.”
By Adedapo Adesanya
Okitipupa Plc was the sole price gainer at the NASD Over-the-Counter (OTC) Securities Exchange on Friday, August 7, lifting the trading platform by 0.44 per cent at the close of transactions.
The share price of the palm oil producer appreciated during the trading session by N25.00 or 9.0 per cent to N277.00 per unit compared with the previous day’s N252.00 per unit.
As a result, the market capitalisation gained N12.29 billion to close at N2,807 trillion, in contrast to the previous session’s N2.795 trillion, while the NASD Security Index (NSI) added 93.63 points to finish at 4,678.08 points compared with Thursday’s 4,657.59 points.
The bourse recorded a price loser yesterday, and this was Mass Telecoms Innovation Plc, which crashed by 3 Kobo or 9.4 per cent to settle at 32 Kobo per share versus the previous day’s 35 Kobo per share.
The volume of securities traded by investors plunged by 81.5 per cent to 535,7560 units from 2.9 million units, the value of securities slumped by 93.9 per cent to N6.0 million from N99.2 million, and the number of deals decreased by 41.9 per cent to 36 deals from 62 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units transacted for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 77.0 million units exchanged for N5.5 billion.
GNI Plc also ended the day as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, trailed by Infracredit Plc with 2.3 billion units valued at N6.5 billion, and Resourcery Plc with 1.1 billion units sold for N415.7 million.
By Dipo Olowookere
A 0.15 per cent growth was achieved by the Nigerian Exchange (NGX) Limited, driven by continued buying interest in banking stocks such as First Holdco and others.
The banking index was up by 1.53 per cent during the session, offsetting the losses recorded by the others. The industrial goods segment fell by 0.37 per cent, the insurance counter shrank by 0.21 per cent, and the energy sector contracted by 0.04 per cent, while the consumer goods space closed flat.
At the close of business, the All-Share Index (ASI) moved up by 364.26 points to 245,573.60 points from 245,209.34 points, and the market capitalisation increased by N235 billion to N158.513 trillion from N158.278 trillion.
Despite the gains printed by Customs Street during the trading day, investor sentiment was weak, as there were 22 price gainers and 24 price losers, indicating a negative market breadth index.
UPDC surged by 9.23 per cent to N3.55, CWG soared by 6.56 per cent to N19.50, AXA Mansard appreciated by 4.80 per cent to N13.10, Neimeth advanced by 4.24 per cent to N8.60, and Cutix improved by 4.00 per cent to N2.60.
Conversely, Red Star Express lost 10.00 per cent to trade at N18.00, CAP declined by 9.98 per cent to N115.45, John Holt shrank by 9.82 per cent to N10.10, ABC Transport depreciated by 9.57 per cent to N5.20, and Legend Internet crashed by 8.70 per cent to N4.20.
A total of 1.5 billion equities worth N26.7 billion exchanged hands in 42,580 deals on Friday versus the 531.8 million equities valued at N20.5 billion traded in 44,826 deals on Thursday, representing a spike in the trading volume, value, and number of deals by 182.06 per cent, 30.24 per cent, and 5.01 per cent, respectively.
The busiest stock during the session was Fortis Global Insurance, with a turnover of 824.5 million units valued at N2.1 billion, FCMB traded 217.9 million units worth N2.8 billion, Access Holdings exchanged 176.2 million units for N4.7 billion, Chams sold 32.5 million units worth N132.1 million, and First Holdco transacted 25.0 million units valued at N3.7 billion.
By Adedapo Adesanya
The Naira further closed south against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, August 7, by 81 Kobo or 0.06 per cent to N1,365.69/$1 from N1,364.88/$1.
It was a similar situation for the Nigerian Naira in the official market during the session as against the Pound Sterling; it lost N1.08 to quote at N1,839.17 versus the previous day’s N1,838.09/£1, and against the Euro, it slipped by N1.23 to close at N1,575.73/€1, in contrast to the preceding session’s N1,574.80/€1.
Further, at the GTBank forex counter, the Nigerian currency weakened against the Dollar yesterday by N2 to settle at N1,371/$1 compared with Thursday’s N1,369/$1, and at the black market, it traded flat at N1,400/$1.
The country’s legal tender came under FX demand pressure on Friday, with turnover rising by 304.3 per cent to $399.5 million from $98.8 million the previous day, with the number of deals slightly up to 107 from 106.
Next week, traders expect the Naira to hold steady, buoyed by dollar sales by the Central Bank of Nigeria (CBN), whose presence in the market could help ease demand pressure.
As for the cryptocurrency market, Bitcoin (BTC) neared the $65,000-mark after it gained 0.8 per cent to trade at $64,968.05, as investors took advantage of recent drops to shore up their holdings.
Previously, the decision by the US Senate to delay a vote on the Crypto Clarity Act until at least September weakened the outlook. The bill, which would set out which US regulator oversees which digital assets, needs 60 votes to pass and it is unclear whether it currently has 50.
Solana (SOL) grew by 2.5 per cent to $74.81, Dogecoin (DOGE) rose by 1.3 per cent to $0.0702, Binance Coin (BNB) jumped by 1.1 per cent to $593.80, Ethereum (ETH) expanded by 0.5 per cent to $1,916.08, Ripple (XRP) also soared by 0.5 per cent to $1.03, and TRON (TRX) appreciated by 0.2 per cent to $0.3275.
However, Cardano (ADA) depreciated by 1.0 per cent to $0.1997, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
