Cyberattacks, Fraud, and Phishing: Have you ever thought about how insurance can help?

Fraud and cyberattacks are on the rise. But our lives are becoming increasingly digital, with no signs of slowing down. The right insurance can help protect your data and recover any losses.

The increasing digitization of society, across all sectors, has made processes that were previously time-consuming and even costly simpler, more convenient, and faster.
One area where this paradigm shift is most evident is in consumer habits. Fueled by the pandemic, online shopping has grown year over year, reaching, by the end of 2024, a turnover of approximately 12.2 billion euros (+10% compared to 2023) and attracted more than 5 million consumers (+2% compared to 2023), according to the industry report CTT E-Commerce.

However, as the volume of purchases increases and the number of e-commerce sites grows, consumers are also required to open more accounts, thereby exposing themselves to greater risks related to the security of their personal data.

Despite the development of better online security solutions and the introduction of legislation aimed at protecting consumers’ sensitive data, the truth is that hackers are always one step ahead and cause millions of euros in losses every year to those who, unfortunately, find their online security compromised.

According to the CNCS (National Cybersecurity Center), in 2024, there was an increase in cybersecurity incidents, particularly among companies (60% were targeted by at least one incident in the past two years), and a 12% increase in digital crimes compared to 2023.

To understand the economic impact of these crimes on consumers and businesses, we turn to the Bank of Portugal: Compared to last year, digital fraud resulted in financial losses of approximately 8.9 million euros, and this figure refers only to fraudulent payment transactions in the first half of 2024, because the extent of the damage—when considering the full range of criminal activities in the online world—will be much greater and is estimated to have reached 965 million euros.

Contributing to these figures are malicious practices ranging from credit card cloning to the well-known online phishing scams and even WhatsApp scams, showing all of us that the danger is closer than we might think.

What types of cybercrime affect consumers in Portugal?

Online personal data breaches are on the rise. This new reality is increasingly concerning; just look at the recent news about a data breach Google, Facebook, Amazon, Apple, Microsoft, and Netflix accounts belonging to 3.5 million Portuguese people.

The attack was carried out using malware—software specifically designed to steal sensitive data and compromise security systems by gaining remote access to computers and smartphones.

This type of cyberattack is just one of the many cybercrimes that affect the Portuguese public and businesses every year. In addition to malware installation, the main types of cybercrime in Portugal are:

• Phishing: a technique used to steal sensitive information (passwords, bank information, etc.) by sending fake emails or messages that impersonate banks or legitimate services;
• Smishing: sending emails or text messages containing links that direct the victim to fake websites or malicious attachments, with the aim of stealing banking information;
• “Romance” scams: establishing an intimate relationship through social media with the intent of getting the victim to send money to the scammer;
• “Hi Dad, Hi Mom” scams: the sending of fraudulent messages in which the criminal impersonates the victims’ child to get them to send money via an immediate transfer through MB Way;
• Fraudulent investments: digital scams in which criminals lure potential victims with high returns on investments with low associated risk, often involving cryptocurrencies;
• Fraud on apps and online stores: after the products are paid for, they are never shipped;
• Identity theft scams: Profiles of the victims’ friends or family members are cloned to ask them for money or personal information, which can later be used to apply for loans.

What kind of damage can result from a cyberattack?

The cyberattacks we discussed in the previous section result in substantial losses across a wide range of areas, as we can see below:

• Money withdrawn directly from your bank account;
• Damage to devices (smartphones, tablets, PCs);
• Legal or administrative expenses related to identity restoration;
• Psychological or reputational damage, which, in turn, may ultimately exacerbate financial losses.

As you can see, the losses are significant and can turn the victims' lives upside down.

There is, however, a way to mitigate these losses. How? Through cyberattack insurance.

Can insurance help? What types of coverage should you look for?

Just as in the automotive, industrial, and even personal spheres, insurance closely follows social trends and the evolving protection needs that arise as human society develops.

With the digitization of daily life—and, more specifically, online fraud—the need for protection means that today we can already find insurance multi-risk policies that include digital protections designed, for example, to help victims of cyberattacks recover financially and psychologically from the criminal act.

In practical terms, a personal cyber insurance policy that offers protection against digital fraud could provide policyholders with:

• Coverage of legal and administrative expenses;
• Legal advice in cases of identity theft;
• Technical support for data or device recovery;
• Reimbursement for proven losses (under specific coverage).

A special note on coverage, since this will be key to understanding the scope of the protection you are purchasing.

Among other things, it is important to determine right from the start whether the coverage is appropriate for the insured’s level of risk exposure. For example, a company that makes sales and accepts payments online is more exposed to cyberattacks in Portugal than an individual, and the sheer scale of the damage will be greater, which calls for more robust financial coverage.

Similarly, a citizen who is the victim of fraud involving an online purchase and suffers financial loss can and should seek coverage that guarantees reimbursement of the stolen amount and supports them through any legal proceedings that, as we all know, can drag on for a long time and require the payment of significant legal fees.

The Importance of Speaking with a Specialized Mediator

Because digital risks to consumers and businesses are real and increasingly common, the decision to purchase personal data insurance—with, for example, coverage for cyberattacks—should be carefully considered, especially in terms of coverage and associated costs.

Given the significance of this decision, the matter should always be addressed with the guidance of professionals specializing in this field, such as a broker like EXS Seguros.

Thanks to dedicated professionals and a wide range of insurance products and coverage options, it will be easier for those seeking protection against the risks of the digital world to find not only the solution that best meets their needs, but also the one that offers the best value for money.

In short, by turning to EXS Seguros, consumers and businesses will be able to benefit from personalized support that includes:

• In the detailed explanation of the types of coverage available for the scourge of cyberattacks and fraud;
• When assessing whether home insurance can include coverage for risks associated with one's digital presence;
• When recommending additional preventive measures, such as backups, two-factor authentication, etc.

Crime in the Future and the Protection It Requires

As we have seen throughout this article, cybercrime is a real and growing threat not only to ordinary citizens but also to businesses, leading to significant financial and reputational losses that can persist over time.

Given this issue, protection should always begin with prevention and be reinforced by purchasing insurance policies that include cybersecurity coverage, since, with the right coverage, you can recover from the damage caused more quickly and, above all, at a lower cost.

Have you ever imagined being the victim of a cyberattack? Learn more and Find out what kinds of protection are available — including your current insurance policy.