Delta Insurance released a white paper on cyber insurance threats to Kiwi businesses yesterday, stating that just 6% of New Zealand SMEs have cyber insurance compared to 14% in Australia.
Delta co-founder and director Ian Pollard said although New Zealand was tackling cyber risk and building resilience, the risk was still there because “we’re connected, we’re tech savvy, and we’ve been protected from a lot of traditional risk because of geography – that’s not the case now.”
“The risks have completely and utterly changed, and with things like the internet of things, blockchain and AI, cyber warfare is on the horizon,” he elaborated. “It’s not just someone hacking into your website, it’s a lot more complicated now and it’s going to get more complicated. That’s the simple truth of it.
“I think this will be of interest to a lot of brokers who are grappling with cyber risks and how that is changing. From the conversations I’ve had with brokers, this white paper is slightly overdue. Our first one was (released) in 2015, and cyber risks change yearly, if not more rapidly than that.”
Pollard believes the insurance industry has a big part to play in educating clients on their risk exposures, what coverages are available and why they should be buying cyber insurance.
“Underwriting agencies, other insurers, brokers need to do their bit as well,” he explained. “We’re seeing the claims situations day-to-day and we need to be able to communicate them more effectively, which is what we have done with this white paper.
“We’re constantly talking to our broker partners and our technology and cyber security partners on what risks are coming so we can keep our (policy) wording relevant. We’ve learnt a lot from the (cyber) claims we’ve had in the last four years, and insured needs and how to respond to those insured needs more effectively.”
He added that what Delta is trying to do through the white paper and its cyber insurance policies is “three-fold.”
“We have the educational piece, which is thought leadership, we do a lot of presenting at insurance events. Second is the wording itself, the insurance policy, and (thirdly) to add an additional dimension, we work really closely with our cyber and risk management partners,” Pollard noted.
In Delta’s white paper it states that ransomware generates $1 billion per year for cyber criminals, and has increased 167 times year-on-year for the last three years.
“I do expect the growth of cyber insurance will increase dramatically for New Zealand over the next few years,” he said.