Cybercrime in South Africa: Rising Costs and Growing Risks

South Africa is seeing a sharp rise in cyber claims, with the average cost of a data breach now reaching close to R50 million in 2024, according to Allianz Commercial’s latest report. Large cyber claims (over €1 million) have increased by 14% this year, with data and privacy breaches accounting for about two-thirds of these claims. Key factors include a rise in ransomware attacks and changing tactics by attackers, often targeting shared personal data records between organizations.

The report also notes a surge in "non-attack" data privacy claims, driven by regulatory changes and increased litigation over improper data collection. Globally, privacy-related class actions are increasing, especially in the U.S., where privacy laws are less stringent than in the EU. Meanwhile, South Africa ranks 14th in data breach costs worldwide, underscoring the financial impact of these incidents locally.

AI, while helpful in analyzing and managing personal data, poses new cyber risks if mismanaged. Poor oversight of AI tools, like chatbots, can expose sensitive information to breaches. Nonetheless, AI is becoming essential in detecting cyber-attacks early, which can prevent breaches from escalating and reduce claim costs significantly.

Allianz recommends companies enhance their cyber hygiene through practices like strict access control, regular patching, and thorough supply chain monitoring to manage these escalating cyber risks. Cyber insurance can also help businesses justify cybersecurity investments and focus resources on the most effective protective measures.