NZ businesses appear unfazed in the face of rising incidents of ransomware and other cyberattacks, as barely 5% of them have taken out cyber insurance to protect themselves against the financial and reputational repercussions of cybercrime.
A Symantec report showed that New Zealand has the second highest number of ransomware attacks in the southern hemisphere, and 21st globally. Latest estimates also revealed that cybercrime costs the country between NZ$250 million and NZ$500 million, and globally US$3 trillion.
Ian Pollard, director of
Delta Insurance, said the New Zealand cyber insurance market has the total potential to reach $500 million in premiums. The Kiwi-owned specialist underwriter said that 50% of its cyber insurance claims were ransomware-related.
To address the growing impact of cyber-attacks in NZ, the government set aside NZ$22 million from its 2016 budget to establish its new Ministry of Business, Innovation and Employment’s national Computer Emergency Response Team (CERT) in April. The CERT is tasked to monitor, track, and advise individuals and businesses on cyber security incidents or attacks impacting New Zealand.
"Public-private sector partnership is essential to improving New Zealand’s cyber security architecture,” said Pollard, who has nearly 20 years' experience in cyber insurance. “Ransomware attacks have made up 40% of our insured cyber claims over the last 12 months. I predict the number of cyber insurers will double over the next two years (from eight to 16) and peak in 2018, making it the best time for New Zealand businesses to buy cyber insurance.
"The global cyber insurance market will increase tenfold within the next eight years from US$3.5 billion to potentially US$25 billion by 2025,” Pollard added. “The cost of cybercrime will also grow from US$3 trillion in 2015 to $US6 trillion in 2021. We contributed to the OECD report which investigated the issue.”
Speaking about the “very severe and wide-ranging consequences” of cyber incidents, Pollard said: "Examples of these include a major cloud provider outage, global malware or ransomware contagion similar to the recent WannaCry event, and a global cyber terrorist incident. Any of these events could be truly global in nature and are perhaps the more concerning incidents, being silent cyber scenarios exposing non-cyber insurance products to potential cyber-related losses.”
Pollard concluded: "Ransomware attacks aren’t going away. New Zealand has had hundreds of ransomware attacks this year and we expect more.”
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