Flood of class actions

Cyber insurance claims grow strongly

In Germany, the average cost of a data breach rose to 5.3 million dollars, in the USA to 9.5 million dollars.

(Bild: KI-generiert – Thanakrit – stock.adobe.com)

According to a study by Allianz, the cost of major cyber insurance claims rose by 17 percent year-on-year in the first half of the year. "In two thirds of all cases, data protection breaches are a contributory cause", the German insurance group announced. One cost driver was a flood of class action lawsuits in the USA.

In Germany, the average cost of a data breach rose to 5.3 million dollars (around 4.8 million euros), in the USA to 9.5 million dollars. After an increase of 30 percent to over 700 cases last year, the total number of cyber damage cases is expected to stabilize this year.

Cyber attacks that are detected and contained too late can be thousands of times more expensive, according to the insurance company. According to Allianz manager Michael Daum, most attackers try to access personal data. "Companies are storing more and more of this sensitive data and exchanging it across company boundaries, which makes it easier for attackers to capture it."

Increasing demands
At the same time, legal regulations have led to more incidents of unlawful collection and processing of personal data. "Damages from these claims have tripled in the last two years," says Daum.

The General Data Protection Regulation (GDPR) applicable in the EU is stricter than the US rules. The resulting gray area is being exploited by plaintiff lawyers in search of sources of income. The ten largest class action lawsuits for data protection violations amounted to 516 million dollars last year.

In Europe and Germany, too, a heightened awareness of data protection rights, increasing availability of litigation funding and a consumer-friendly litigation environment could lead to mass data protection lawsuits.