ICA responds to concern over SME cyber take-up
Insurers have sought to explain barriers to SMEs taking up cyber cover after the federal government flagged possible intervention.
In a discussion paper on digital threats facing Australia, the government says many businesses report difficulty accessing cyber insurance or see it as too expensive.
“The complexities or technical requirements of insurers could also be a deterrent, particularly to [SMEs], where they may be unable to meet the cybersecurity standards applied to larger enterprises,” the paper says.
“The market for cyber insurance in Australia is dynamic and evolving. Any interventions from government need to be carefully considered to not distort the market or inadvertently affect pricing.
“However, there is a potential role for government to better support availability of cyber insurance products, particularly for [SMEs].”
The Insurance Council of Australia says low understanding of cyber risk and limited awareness of cyber cover affect uptake.
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“We note that the intrinsic value of cyber insurance can be difficult for an [SME] operator to determine, particularly where ... decision-makers have a limited understanding of their digital risk profile,” it says in a submission.
“Additionally, those considering cyber insurance for the first time may not completely recognise or understand the value of the pre-, during and post-incident support many cyber insurers offer.”
ICA says pricing may be a factor when considering cyber insurance, but premiums are influenced by both the nature of the risk and broader market dynamics “such as competition in the market and rising claims at an industry level (e.g. due to ransomware or other events)”.
The peak body says it would welcome the opportunity to undertake research with the government into SME awareness of cyber cover and market penetration in Australia.
“Gathering a greater understanding of the awareness of, and appetite for, cyber insurance ... would enable the identification of opportunities to drive enhanced resilience and insurance penetration.”
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