NEW YORK: Cyber security threats will increase for debt issuers this year, a new report by Moody’s Investors Service warns.
Coronavirus-induced changes at workplaces as well as homes have increased the risk of cyber threats this year. These could impact the creditworthiness of companies, the US ratings agency said.The increased risk of cyber threats has also boosted the cyber security market, which is forecast to be worth $363.05 billion in 2025 – almost 125 per cent more than the amount spent in 2019, according to Mordor Intelligence, a research consultancy. The industry is projected to grow at an annual 14.5 per cent rate over the next five years, report agencies.
The National looks at seven key risk factors and trends outlined by Moody’s.
Credit risks for hospitals arise when cyber attacks compromise Covid-19 vaccine supply chains and patients’ confidential data, making them vulnerable to financial threat and lawsuits. These risks are likely to surge and could disrupt vaccination programmes, prolonging the pandemic and its economic effects.
Some state actors will launch cyber attacks because they are “cheap, reliable, portable, easily hidden and hard to detect”. The state-sponsored attacks threaten reputational damage, disruption of work flow and loss of intellectual property. “Entities that find themselves the targets of these attacks could experience substantial credit damage,” Moody’s said.
The increasing cases of ransomware attacks are credit-negative for insurers since it exposes them to higher claim costs.
“Insurers have responded to rising financial losses by raising premium rates and narrowing terms and conditions … including lowering policy limits … higher insurance costs could weigh on the finances of some organisations, causing them to rethink the purchases of these products,” the agency said.