The Insurance Council of Australia (ICA) has called on local insurers, businesses and the government to work together to establish a sustainable cyber insurance market.
In its new paper, Cyber Insurance: Protecting our way of life in a digital world, the representative body of the general insurance industry said “unprecedented growth in digitisation and connectivity has led to increased cyber risk”, particularly coming out of the COVID-19 pandemic, which ranges from data breaches by employees to criminal gangs targeting business systems.
ICA has argued that cyber insurance – which provides support to businesses in these matter – is not yet well-known by the industry, which along with increasing loss ratios and reduced risk appetite requires an overhaul of the government’s current policy settings, including making minimum security requirements and third-party certifications for software and hardware mandatory.
ICA CEO Andrew Hall said that change is necessary as currently, only 20 per cent of small businesses have cyber cover, however digital adoption since the pandemic is increasing rapidly.
“Right now, there is a small number of insurance providers. The combination of a small premium pool and the increasing sophistication and maliciousness of some cyber attacks have put significant pressure on insurers and businesses alike,” Mr Hall said.
“This policy paper is the first step in getting the settings right for managing cyber risk in Australia and will give the industry greater confidence in participating in the market and providing cover.”
Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.
Neil is also the host of the ifa show podcast.
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