Trans-Tasman business advisory firm, BDO, has teamed up with the Australian cyber emergency response team, AusCert, to survey Australian and New Zealand companies’ approach to cyber insurance.
AusCERT general manager, Thomas King, said the survey would help to identify current cyber security trends, issues and threats facing businesses in Australia and New Zealand.
Partner and national leader of cyber security at BDO, Leon Fouche, said discussions about how to manage cyber risk were starting to gain momentum in the boardroom.
“If you are a business owner or key decision maker, you need to first understand whether cyber insurance is right for your business, and if so, which policy best suits your needs,” Fouche said. “To achieve this, you need a thorough understanding of what risks you truly face.”
He added: “The cyber insurance market is evolving, and due to the lack of reliable data about the cyber security trends in local markets, insurance companies are limited in their ability to develop robust risk modelling for the costs of cyber-attacks. They mitigate this by having restrictive terms and exclusions in their cyber insurance policies.”
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In April this year the US-based Insurance Journal reported rapid growth in cyber insurance, but little standardisation. “With cyber insurance premiums expected to grow from around $2 billion in 2015 to an estimated $20 billion or more by 2025, insurers and reinsurers are continuing to refine underwriting requirements,” it said.
The article also quoted Timothy Zeilman, vice president of a subsidiary of Munich Re, saying cyber insurance was an immature marketplace with little standardisation. “If you look at 10 different cyber liability policies, you’re likely to find 10 different packages of coverage,” he said. “It’s still very immature, the coverage itself is changing, and the market is trying to find a standard.”