RAMPING UP CYBER RISK MANAGEMENT

By MARTIN WANLESS

If the threat of a cyber breach wasn’t firmly on every business’s radar prior to 2022, the Optus and Medibank breaches firmly planted it right in the centre of every Director and business owner’s consciousness.

But, while the widespread impact of those breaches made for significant media coverage, it’s a threat that’s been around for more than a decade – and shows no sign of abating.

“Cybercrime has been steadily increasing over the past 10-plus years,” says Troy Filipcevic, CEO of Emergence Insurance.

“Committing crime over the internet has proven to be both very lucrative and relatively safe, with most perpetrators never being caught. According to the Australian Cyber Security Centre (ACSC)’s Annual Cyber Threat Report, they received 76,000 cybercrime reports in the 12 months to July 2022, a 13 per cent increase compared to the previous year.”

What the Optus and Medibank breaches did do, however, was heighten awareness and scrutiny across the board – and with litigation to follow, it’s going to be a space to watch with interest.

With ASIC’s recent ‘Directors beware’ warning, the Privacy Legislation Amendment Bill, which increased the maximum penalties for serious or repeated privacy breaches from $2.2m to $50m (or three times the value of any benefit obtained through the misuse of information, or 30 per cent turnover –whichever is greater) and the investigations into Medibank, it’s clear that businesses are expected to do far, far more than many were in previous years.

“The heightened awareness is positive, and the number of businesses enquiring about cyber insurance for the first time, has noticeably increased,” says Richard Smith, Head of Cyber and Regional Manager at Blue Zebra.

“The litigation that will follow the Optus and Medibank attacks will be closely observed by cyber insurers as it will probably lead to a more litigious environment in respect to cyber breaches.”

MANAGING TODAY’S RISKS

Cyber’s the most dynamic and evolving area of insurance, and as such, insurers, brokers and clients are having to continually ensure they’re managing the risk of today, and not last year.

Good risk management practices are now a non-negotiable, says Rob Collyer, Underwriting Development Manager at Nova Underwriting.