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Cyberattacks are an increasing threat, with more than half of Kiwi businesses having experienced an attack within the last year. Yet only 6% of SMEs hold cyber insurance, and relatively few understand the risks that this emerging threat can pose.
NZI statistics indicate that New Zealand sees approximately 108 cyberattacks on companies per day, and that an attack will cost the average SME $19,000 per breach. According to the broker community, every single business is susceptible to cyber threats.
“There isn’t enough acceptance from businesses regarding the risks that they face,” senior commercial broker and branch manager for Rothbury Central Otago, Guy Worsley tells Insurance Business.
“There’s a lot of information out there in terms of what the government and the insurance industry has put out, but it is a risk that can’t easily be seen or quantified. It therefore becomes a potentially very large exposure for businesses.”
According to Worsley, businesses will benefit from the protection and peace of mind that a comprehensive cyber policy will provide, and it will give them access to a team of experts to mitigate damage as quickly as possible.
“I had a call from a client who told me they may have suffered a cyberattack,” Worsley states. “They had received an email stating that they had changed their bank account, when they hadn’t. This all happened on a Friday afternoon, and if it hadn’t been dealt with there and then, they could have lost an awful lot. We were able to very swiftly give them practical advice on what to do, but we were safe in the knowledge that behind them sat both a cyber liability policy and a client policy. It’s that peace of mind that people buy, and the quick access to good advice in a critical situation.
“Clients need to understand that it’s not ‘if’ a cyberattack or a breach happens, it’s more likely to be ‘when’. The media is really driving interest in this area, but it’s not necessarily driving buying behaviour. I’d like to see a realisation and an acknowledgement that given the number of cyber breaches happening around the world, every business is likely to be affected at some stage.”
The key challenge remains that these risks are unseen and therefore easily overlooked, and are often left to third-party providers and IT departments to deal with.
“The risk should not just sit with the IT department alone. It really sits with directors, owners and CFOs,” says Worsley. “At the end of the day, they’re the ones who will have to pick up the pieces in the aftermath of a breach or attack when their business is unable to operate and their reputation is compromised. As insurance brokers, we spend quite a lot of time, energy and money on training and increasing our awareness of the risks that businesses face so that we can help to educate our clients and get them the best insurance protection we can.”
