Cyber Risk Focus: The Rest of the World

This week’s Data Spotlight takes a look at the cyber risk landscape in places not in the US or Europe – the “rest of the world.”

Because cyber crime has no geographic boundaries, no corporation or government is immune from an attack. Geography does, however, play a role in organizations’ response to the threats.

Although corporations around the globe likely experience a similar number of cyber attacks, the number of cyber-related cases and the frequency by which the cases result in litigation are far fewer than in the US. This is largely because companies are less likely to report a breach than US companies, which are subject to state breach notification laws and some federal oversight.

This data spotlight will provide a high level overview of cyber event and litigation trends in the rest of the world.

“Digital data breach, loss, or theft” makes up the largest proportion of cyber-related events across all regions: the USA, UK, and the rest of the world (ROW). This is followed by “system/network security violation or disruptions” and “improper disposal/distribution, loss or theft of printed records.” Notice the variance in the distribution of events by region and type.

This chart shows a time series of the number of cyber-related cases in the ROW. It illustrates a clear upward trend that continued through last year (2013).

While the number of reported cyber cases is not near the levels experienced in the United States, the continued upward trend differs from the U.S. and Europe where the number of cases peaked in 2009 and remained relatively flat in the subsequent years.

The cause for fewer reported cyber cases in the ROW than in the US is largely due to fewer laws explicitly requiring breach notification. Additionally, legal systems in the ROW are generally less plaintiff friendly, making it often more difficult and potentially more expensive to pursue claims in the courts as compared to the US.

Overall, the largest composition of cases can be attributed to “digital data breach, loss or theft,” but similar to the US and Europe, over the past couple of years these cases have given way to “system/network security violations or Disruptions.”

This is perhaps not surprising since cyber-crime tends not to discriminate base on geography; therefore, trends based on the type of events are usually global in nature.

This chart shows the relative litigation frequency by region. The US – one of the world’s most litigious countries – has by far the largest litigation frequency, followed by UK/Europe, and the ROW.

The litigation frequency is obtained by taking the number of cases that have entered litigation over the total number of cyber-related events.

This chart shows that manufacturing has the largest litigation frequency among industries, followed by finance, insurance, and real estate.

The litigation frequency is obtained by taking the number of cases that have entered litigation over the total number of cyber-related events.