Cyber threats have become the risk of the century and if cyber security is one step behind these threats then cyber insurance is two steps behind, believes Munich Re.
“Risk managers of large institutions already consider cyberattacks to be a severe risk, and therefore have insurance policies to address this. We are now seeing more and more small companies asking for cyber cover, especially after the latest large-scale attacks,” the insurance giant stated.
Closer to home, Delta Insurance director Ian Pollard said his business is preparing a white paper on cyber threats, as well as reworking its cyber insurance policies wordings. He believes there is significant room for growth in the sector – in New Zealand the cyber market is worth from $10-$20 million, compared to the total liability market which is valued at about $450 million.
“So, there is large room for growth, but also large room for insureds to buy this product because it’s the number one threat that companies are facing at the moment, arguably,” he said.
“Last year, we saw (a lot) of ransomware and a number of high profile attacks and breaches globally. But I don’t think it’s fair to say across the board that businesses are inadequately prepared. We have seen an increase in awareness in risk in this area, especially in New Zealand since we started writing this business in 2014. But at the same time, there is a lot of room for improvement because the risks are not static, they are changing daily.”
With ransomware becoming a hot topic for businesses in New Zealand last year, what’s on the cards for this year?
“I think this is a moving feast, there are a lot of things happening at the moment, and the risk spectre is increasing,” explained Pollard. “Ransomware is becoming more sophisticated. There are people in the security arena who are saying that it’s moving from desktop, or from an embedded email-initiated attack, to ones contained in CRM systems, the non-email-based systems. They’re morphing into something a lot more dangerous.
“The threat landscape is changing significantly.”
Pollard said as well as increasing the commercial need for cyber insurance, Delta was also interested in the impact cyberattacks could have on the home, especially as residential properties become increasingly digitally connected via the internet-of-things.
“Devices in the home are becoming more connected, thermostats, heating and security systems,” he explained. “We’re in the process of investigating the (potential cyber) threats on the home front. A lot of reports talk about commercial entities but what about the home front? It’s the next battleground for cyberattacks.”