Australia is a “legitimate economic crime hotspot,” which could present brokers and insurers with opportunities according to PricewaterhouseCoopers
In PwC’s 2016 Global Economic Crime Survey
, it was found that 52% of Australian businesses experienced economic crime in the last two years with cybercrime numbers showing a startling rise.
65% of Australian organisations experienced cybercrime in the last two years with more than 1 in 10 reporting losses over $1 million.
PwC Partner and Forensic Services Leader, Malcolm Shackell, said that the current state of economic crime does not paint a good picture of the Australian business landscape.
"I think it’s fair to say we’re a legitimate economic crime hotspot - it’s not a good picture,” Shackell said.
“The high rate of economic crime exposed in part reflects our serious approach to reporting but given we are lagging on early detection mechanisms, it reflects our reliance on doing what we have always done.”
Shackell told Insurance Business
that the statistics trending up in the latest report could present an opportunity for brokers and insurers across various lines including fidelity, D&O and cyber.
As cybercrime numbers rise at record-breaking levels, Shackell noted that ignoring cyber threats are no longer an option.
“The problem isn’t going to go away,” Shackell told Insurance Business.
What we are seeing is traditional types of economic crime are now being committed with a cyber angle to them
“You can’t ignore the statistics that are coming out of this report and what we are seeing anecdotally.
There is more cybercrime activity out there than ever before and insurance is one way to protect yourself, at least as far as financial loss is concerned to protect yourself against that particular threat, so I think it is one way and a very useful way but of course, it is not the only way.
In Australia, it [cybercrime] has gone from almost statistically insignificant five or six years ago to 65% of respondents saying that they had experienced cybercrime so that is a huge jump.
“To now be the number one economic crime, ahead of asset misappropriation which has been the top one for twenty years, that is telling you something I think.
“In terms of particular risk, and if cybercrime is your risk, you deal with risk through prevention, detection and then reaction and part of that reaction or reaction-recovery paradigm is insurance and that would be cyber insurance.”
Shackell stressed that cybercrime is not just a worry for large business in Australia as small and medium sized businesses present an alluring prize for cyber criminals.
“Sometimes what you see with small to medium size businesses, like anything they don’t necessarily have the resources around prevention, detection, cyber teams that you might see in larger organisations that can fund that kind of thing and that makes them, arguably, a more attractive target,” Shackell continued.
With cybercrime now a legitimate threat to Australian businesses, Shackell stressed that businesses need to transfer awareness to action.
“The awareness of cybercrime as an issue is definitely on the increase and that is one of the statistics that comes out of the report so the awareness level is rising,” Shackell continued.
“One of the things we are not necessarily seeing, and hopefully we will see it in the next couple of years, is organisations and boards and senior executives being aware of the problem then translates to actual actions around trying to mitigate the problem.”