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The Cost of Cybercrime Outweighs Investment in Cybersecurity

More money is spent on cybercrime than cybersecurity

Guy Carpenter research shows that the size of the cyber market is $6 billion, and, according to Cybersecurity Ventures, only $6 trillion is spent on cybersecurity products per year. Only 42% of businesses invest in a cyber product, according to Marsh Specialty data.

This gap between spending and forecasted cost puts the almost $21 trillion in intangible assets of the Fortune 500 at risk.

These drastic costs are a result of more sophisticated and accessible forms of ransomware that are now available “off the shelf” to bad actors. At the same time, the “new normal” from the pandemic continues to foster distributed work environments that are often easier to penetrate.

A cohesive cyber strategy, as featured in MMC’s Cyber Handbook 2022, is critical to keep pace with sophisticated cyberattacks in complex and converging technology ecosystems. There is also a need for cyber insurance and reinsurance to help solve this expanding protection gap by developing a robust cyber risk transfer market with well-defined product options for intangible risk.

Heatwave Grips Western US

The U.S. West Coast has endured record-breaking high temperatures in September as a heat dome trapped hot air over the region. On September 7, more than 61 million people were under extreme heat advisories in California, western Arizona, and southern Nevada. The heatwave fueled wildfires and stressed the power grid, as temperatures reached triple digits throughout the region before Tropical Storm Kay brought relief over the weekend. 

NASA scientists studying Southern California heat waves found that they are becoming more intense, more frequent, and longer-lasting. “If you look at the sheer magnitude of all-time high temperatures that were set — in any month, in any year — this heatwave is definitely unique,” Brian Kahn, an atmospheric scientist at NASA’s Jet Propulsion Laboratory, told NASA’s Earth Observatory

Extreme heat is becoming more common across the world, as climate change intensifies weather patterns. This summer alone, heatwaves rippled through Europe, North Africa, the Middle East, and Asia. The U.N.’s Intergovernmental Panel on Climate Change warns that the world has until 2030 to reduce carbon emissions by 43%, or the goal of limiting global warming to 1.5 degrees Celsius will be out of reach.

U.S. Housing Sales Plummet to Two-Year Low

Housing sales in the U.S. have sunk to their lowest point since May 2020, declining by 5.9% in July. This is the sixth consecutive month that sales have declined, reflecting the impact of rising mortgage and interest rates. This is the first U.S. housing downturn since the Great Financial Crisis in 2007-2008.

Some experts project that housing sales may soon stabilize, as the mortgage rate falls from 6% in June to 5%. “Home sales may soon stabilize since mortgage rates have fallen to near 5%, thereby giving an additional boost of purchasing power to home buyers,” said National Association of Realtors Chief Economist Lawrence Yun in Trading Economics.

But researchers at Goldman Sachs project that the housing market downturn will continue into 2023. They predict that this year, new home sales will drop by 22%, existing home sales by 17%, and housing GDP by 8.9%. Despite the downturn, housing prices are expected to remain high due to inflation and a limited inventory of homes.

UK Prime Minister Caps Energy Bills As Costs Skyrocket

Source: The Economist

The United Kingdom’s new prime minister Liz Truss is under pressure to help Britons with energy costs, as natural gas prices skyrocket and winter approaches, reports The Economist

On August 26, energy regulator Ofgem reset its energy price cap, raising the average household’s monthly energy bills from 164 pounds ($194) to 296 pounds ($340), starting in October. Forecasts from Cornwall Insight consultancy group predict that without government intervention, energy bills will rise to 449 pounds ($516) in January and 551 pounds ($633) in April. Without government support, experts estimate that energy bills will make up 14% of the poorest fifth of households’ spending — double the amount before the pandemic. Middle-income households will also face steep prices, with 9-10% of their spending consumed by energy costs.

In response, Prime Minister Truss announced that energy bills will be capped for all households at 2,500 pounds ($2,874) a year — about $240 a month — until 2024. Businesses will also benefit from the price cap, though for a shorter period of six months.

Climate Change Causes Deadly Flooding in Pakistan

Source: The Economist

A deadly monsoon season in Pakistan has led to the country’s worst flooding in a decade, as climate change causes increasingly extreme weather around the world. 

By the end of August, Pakistan had received three times its annual average rainfall. Summer monsoon rains caused the worst flooding in areas around the Indus River, with some provinces receiving up to five or six times their 30-year average rainfall. More than 33 million people have been impacted by the flooding, and at least 1,100 people have died. 

Pakistan is responsible for less than 1% of the world’s greenhouse gas emissions, but it is the eighth-most vulnerable country to climate change. Some officials estimate that the recovery will cost $10 billion. The costs of flooding also affect the rest of the world: Flooding in 2021 destroyed more than 12 million acres of crops, contributing to the global surge in food prices. Worldwide, flooding has caused over 250,000 deaths and led to economic damage exceeding $1 trillion since 1980.

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