ICA calls for major overhaul of Australia's cyber insurance market

The group highlights challenges to maintaining and developing a cyber insurance market.

The Insurance Council of Australia is urging businesses, insurers, and the government to work together to establish the settings for a vibrant and sustainable cyber insurance market to underpin economic growth into the future.

In its newly released whitepaper, Cyber Insurance: Protecting our way of life in a digital world, the ICA highlights challenges to maintaining and developing a cyber insurance market to support Australian individuals, businesses, and organisations operating in the digital economy following the COVID-19 pandemic.

“This unprecedented growth in digitisation and connectivity has led to increased cyber risk. The spectrum of cyber risk includes inadvertent or deliberate data breaches by employees at one end and ranges to criminal gangs and nation-states targeting business operating systems at the other end,” ICA said.

With the proliferation of cybercrime, responding, rectifying, and reporting it has been challenging and expensive for businesses. The ICA said cyber insurance provides important support to these businesses, including facilitating access to expert assistance, which is particularly valued by smaller businesses.

Among the recommendations made by the ICA to support the industry, is better data sharing, both from industry to government and importantly from the government to industry to prevent, detect and report cyber-attacks.

The ICA also said that minimum security requirements and third-party certifications for software and hardware should also be made mandatory to reduce the vulnerability of cyber-attacks.

Additionally, investment incentives for education around cyber risk, as well as for businesses willing to disclose and work with enforcement agencies are also needed.

ICA has also called for the government to develop and issue an Australian cybersecurity standard to ensure that government agencies and contractors with whom they do business evaluate their cyber maturity according to uniform and constantly evolving standards.

According to ICA Andrew Hall, cyber insurance awareness is low within the Australian business community, with only about 20% of small businesses having cyber protection.

“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,” Hall said.

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