Data breaches and cyber events in the retail may occupy much of the public’s attention, but they account for just 12 percent of all cyber incidents when tallied by industry. The services category and financial services organizations both outstrip retailers in terms of breaches, according to Advisen’s Loss Insight Database, at 47 percent and 18 percent, respectively.
However, the annual number of cyber cases in the retail sector, which has been a popular target due to the large amount of consumer data collected and stored by retailers, have skyrocketed in the last 10 years, quickly doubling and tripling over the decade. In addition, there have already been 95 reports of cyber cases affecting retailers in 2015.
A look at Advisen data breaking the retail sector down into store categories found that the average number of cyber events affecting general merchandisers exceeds the average number of events across all industries and is significantly higher than the average across all retailers. The data also showed that the event count per company would have been even higher if there were fewer companies in the crowded retail sector.
As reports indicate, cyber events can be costly to recover from for any organization. Retailers in particular must fear the one percent chance that they could be subject to a nearly $200 million event. Three percent of cases, according to Advisen data, could cost over $60 million. These costs include not only the impact of notifying customers, fixing flaws in security, but also litigation and reimbursing banks and payment card issuers for fraudulent charges.
As with most industries
Erin is the managing editor of Advisen’s Front Page News. She has been covering property-casualty insurance since 2000. Previously, Erin served as editor-in-chief of The Standard, New England’s Insurance Weekly. Erin is based in Boston, Mass. Contact Erin at [email protected].
