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AIG Europe: Cyber claims likely to surge after new EU data rules take effect

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AIG Europe: Cyber claims likely to surge after new EU data rules take effect

A further surge in data breach and other security failure insurance claims is likely after the European Union's General Data Protection Regulations, or GDPR, take effect May 25, AIG Europe research found.

The new data rules could become a new tool for negotiation by extortionists, who will threaten to compromise an organization's data unless a payment is received, knowing that the consequences will be more significant, said Mark Camillo, head of cyber for Europe, the Middle East and Africa at AIG.

The volume of cyber claims is expected to increase as companies will be more inclined to report breaches. The rules could also lead to more shareholder lawsuits against companies and their directors, according to the study.

AIG warned that the automation and commoditization of ransomware will likely continue in 2018. It expects a shift toward "cryptojacking" by cybercriminals due to the surge in value of cryptocurrencies.

Business/network interruption is expected to continue to bring significant financial consequences in 2018, which will boost demand for cover and the continued growth of the cyber insurance market across Europe, according to the study. Claims frequency and severity are likely to increase as the business grows.

Aside from rolling out a robust cyberrisk strategy and securing cyber insurance, organizations should also prepare and practice their response to a cyber breach, AIG said.