Is cyber risk worth the cost of connectivity?

Is cyber risk worth the cost of connectivity? | Insurance Business

Is cyber risk worth the cost of connectivity?
Zurich has released its latest cyber risk report which details economic benefits of $41 trillion which could be gained through greater security online by 2030.

The report, entitled Overcome by Cyber Risks? Economic benefits and costs of alternate cyber futures, details a handful of scenarios which range from the best possible cyber outcomes to nightmare-like cyber futures to see how cyber risk will affect global GDP over the coming years.

While one future could see $41 trillion worth of benefits, another could see a 2.4% dip in global GDP thanks to cybercrime and warfare which could see $124 trillion wiped off the books.

Kym Beazleigh, national underwriting manager for Zurich Australia, said that the country faces an increased cyber risk over the coming years as businesses must prepare now.

“Adverse impacts of cyber disruptions are greater for advanced economies like Australia which are characterised by high connectivity over an increasing number of devices and greater use of digital platforms for business and personal use,” Beazleigh said.

“It is absolutely an Australian risk, of course it is an international risk as well but the internet and technology doesn’t discriminate between borders.

“You can be a US company with an Australian subsidiary or vice versa and it makes no difference, if you get into that system then you can get into any part of that system globally.”

Beazleigh noted that risk management will be a challenge for businesses in the ever-evolving cyber world as technology changes will quickly make plans obsolete.

“I think the challenge for business is around building resilience and building that risk management framework because this is a new and constantly emerging exposure,” Beazleigh told Insurance Business.

“You’ve got your traditional risk management exposures that business will face depending what business they are in, depending whether they are public or private, a lot of those have not changed from day dot. They’ve emerged a little bit along the way but nowhere near as swiftly as cyber.”

Beazleigh said that the Australian market is “heading in the right direction,” as cyber continues to play on the mid of businesses as legislative changes could see the market continue to grow.

“I wouldn’t say you’ve seen a massive uptick but I think a lot of that is tied to legislative requirements.

“What we have seen though is a huge increase in enquiries in 2015 we’ve definitely seen an increase in the buying rate in terms of requests to actually put coverage in place. Again, I think that will take another step forward this year.”

To access the full Zurich report, click here.