The industry needs to work together to help raise awareness in the cyber market, one expert has said.
The cyber insurance market has continued its development throughout 2016 according to Callum McMillan, national commercial manager - financial lines at Zurich Financial Services Australia, but more needs to be done to help raise awareness of the cover.
“Brokers have done a great job and we can’t expect brokers to do all the work, the whole industry needs to be working together,” McMillan told Insurance Business.
While McMillan has been pleased by different parties in the industry helping to drive awareness around cyber risk, particularly in the SME space, more can still be done.
Vulnerabilities continue to grow and SMEs are now “a low hanging fruit for a cyber criminal” as many cannot maintain the levels of security needed to stave off attacks.
“Because of the great connectivity these days, there are also increased vulnerabilities, particularly for SMEs who probably weren’t aware of the fact that they are such an obvious target,” McMillan continued.
“In the past SMEs haven’t been aware that they are an obvious target to cyber crime, but there has certainly been an increased understanding that SMEs can be targeted, and the negative impact this can have on their business as well as on any third parties that they work with.”
Using an analogy that all Australians can understand, McMillan said that the current cyber insurance market mirrors the Slip-Slop-Slap skin cancer campaign launched in the 1980s. Cyber insurance remains just one layer of cyber risk and a business that ignores one facet of cyber runs the risk of being burned.
The expected launch of mandatory breach notifications in 2017 are set to have an impact on the cyber market in Australia, as similar legislation around the world has seen a boost in coverage following legislative changes.
McMillan said that changes in contracts will also help drive the market. Insureds, particularly those with Government contracts, are increasingly obliged to ensure that they have adequate cyber insurance in place which could also help increase uptake.
For 2017 and beyond, McMillan noted that changes around the D&O aspects of data breaches could be the next phase of development for the cyber market.
“No longer can a company rely on IT to be responsible for this exposure, it goes all the way up to board and management,” McMillan continued.
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