Rising dealmaking activity and a growing reliance on major software vendors have created new opportunities for threat actors to target cybersecurity gaps, according to a new report. Resilience’s mid-year 2024 cyber risk report states that threat actors have evolved their tactics this year to exploit vulnerabilities resulting from M&A and technology consolidation. The report is based on data from Resilience’s threat intelligence team and insurance claims portfolio.
The report found that ransomware had remained the leading cause of loss since January 2023, with 64 per cent of claims relating to ransomware resulting in a loss. Resilience also recorded a 411 per cent increase in the financial severity of ransomware-related claims between 2022 and 2023.
35 per cent of claims received since January 2023 resulted from vendor data breaches or ransom attacks that exploited a third-party vendor. In 2024, that figure had increased to 40 per cent, with Resilience saying it expected this to grow further.
The manufacturing and construction sectors have seen the biggest increases in claims this year, with manufacturing increasing from 15.2 per cent of all claims in 2023 to 41.7 per cent this year and construction rising from 6.1 per cent to 25 per cent.
Resilience noted that M&A deal volumes increased 36 per cent in the first quarter of 2024, with interconnected modern business systems and increasing dealmaking activity amplifying the impact of cyberattacks.
The report also stated that technology consolidation can have catastrophic consequences in the event of a cybersecurity breach, with numerous industries reliant on single suppliers for critical software services. As well as potential ransom payments, businesses impacted by breaches can also face lost revenue and interruptions to their business.
Vishaal Hariprasad, Resilience co-founder and CEO, commented: “Major attacks like the ones on Change Healthcare, CDK Global, and AT&T have been wreaking havoc and making headlines, but they also remind us that we’re facing a new status quo.”
“Increased vendor interdependence and M&A activity have created an unprecedented opportunity for hackers, with far more points of failure and potential for human error.”
According to Tom Egglestone, Global Head of Claims at Resilience, companies should adopt a risk-centric approach, in which security strategies and the financial implications of cyber incidents are aligned.
Find out how companies involved in M&A transactions can manage and mitigate cybersecurity risks
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