How attainable is cyber insurance in Australia?

While in Australia, only 20 percent of SMEs and 35 to 70 percent of larger businesses have standalone cyber insurance, according to the Insurance Council of Australia, there is still the issue of attainability.

Luke Barker, director and general manager at BT Security APJ MEA discusses with Digital Nation about how attainable cybersecurity insurance is in Australia.

He said at this current point in time, cyber insurance is not necessarily attainable purely because of the cost prohibitions around premiums.

“You're looking at the SMB mid-market level, a lot of those organisations are struggling to even get budget for basic security controls. Then you're trying to add cyber insurance on top of that when the sovereign issuers are going to do an analysis of their controls that they have in place,” he said.

“They're likely going to be a higher risk insurance customer, which means that their premium is going to be significant.”

Barker added, “It's going to be unattainable at this point, right until we start to get a lot more data, which enables a lot more efficiency in terms of premium design, and coverage. But also, the onus on the customer, that's an issue of process.”

Cybersecurity insurance in Australia highlights the issue of the haves and the have nots, Barker explained.

He said SMBs at the smaller end are looking for government assistance as the compliance requirements are imposing on them.

“These owners say to spend that money to adhere to the compliance and regulations they don't know they’re going to do it, it's impossible,” he explained.

“It's one of those things that cybersecurity requirements is going up. Breach likelihood is going up. criminal activity is going up. But prices are also going up for vendor technologies and security controls,” he said.

Because the industry is still young, many factors like the affordability of cyber insurance is up in the air, Barker said.

He said, “It's still an immature market for most insurers. It is still an immature consumption for a lot of organisations. They don't understand the coverage versus premium piece yet because there's such a divide in that area at the moment.

“It is a timing thing and that's why we're seeing insurers starting to look at utilising technologies to give them a better understanding of an over a potential customers risk posture and that would look like from an insurance perspective.”