Digitalisation opens the door to increased cybercrime: computer-based fraud via the internet. The figures are unsettling, and affected companies prefer to stay ‘out of the spotlight’. Jean-Pierre Fekenne, business manager of Fidelity at Euler Hermes, explains: "No one likes to admit being vulnerable."
Are you aware of your company’s fraud risks and how to prevent them?
Many companies are wary of the reputational damage that comes with the reporting of fraud. Cybercrime is therefore an underexposed phenomenon today.
Official figures from an independent auditor provide a reliable picture of the real extent of the problem, and the actual impact in Belgium is a lot higher than expected:
- 77% of companies dealt with a fraud attempt in the last 5 years
- 22% of companies have been fraud victims in the last 12 months
- 150,000 euros is the average loss per company per fraud case
(Source: BDO Fraud Survey, November 2018)
On a global scale, the financial losses due to cybercrime are even higher. What stands out: both large and small companies fall prey. However, certain sectors are more susceptible than others, especially those that manage ample money flows.
Euler Hermes is the only insurer on the Belgian market that offers high coverage against financial losses as a result of fraud, a guarantee that is almost unprecedented within Europe.
Fraud is growing in proportion to increased digitalisation
Banks and traditional insurers do not cover this type of loss. The fraud coverage of Euler Hermes includes an extensive package that reimburses both the financial losses and the associated costs. “And that for both external and internal fraud. You are fully covered with just one insurance policy, freeing you do business with peace of mind. Belgium is an interesting test market for our product due to the small scale and diversity of the entrepreneurial landscape."
Need for a multidisciplinary approach
While fraud insurance may be relatively new, Jean-Pierre Fekenne has noticed an increased awareness among companies that is partly due to GDPR. “The demand for protection is high, especially from companies that manage large and sensitive data sets. But there are still some that underestimate the risk. They do invest in physical IT protection but turn a blind eye to the human factor: unsafe passwords, careless data handling, etc. As a result, sufficient employee coaching remains vital.”
“It is worthwhile to attack the issue on different fronts. Compare it to a fire in your engine room: despite all preventive measures and modern detection systems, your equipment will inevitably suffer damage when a fire breaks out. A fire insurance policy will help you compensate for the losses. It is the same with fraud insurance: preventive measures are indispensable, but never completely exclude the risk of damage.”