Cyber attacks are among the top five risks faced by Australian businesses as cyber insurance premiums soar across the world, a report claims.
According to a survey from professional services firm Aon, cyber attacks and data breaches were the fifth-most concerning risk Australian businesses are worried about.
Although cyber risk is relatively new to the top 10, making its debut in Australia in 2017 and globally in 2015, it marks a precedent that local cyber security services providers (MSSPs) might find reassuring as they work on their sales pipeline prospects for the coming year.
Outlined in Aon’s 2019 Global Risk Management Survey, the results showed that insurance premium growth increased by more than double around the world, rising to US$4.5 billion in 2019, up from US$1.5 billion in 2017.
In Australia, this spending can be correlated to the take up of cyber risk insurance – 60 per cent of local businesses surveyed had purchased cyber risk insurance in 2019, compared to 36 per cent in 2017.
However, the number of businesses that have not purchased cyber
risk insurance, and do not intend to purchase it in the future, also increased
by 11 per cent to 29 per cent over the same time period, according to the data.
A statement from Aon said that the take up increase is in part due to the introduction of the Notifiable Data Breaches scheme in February 2018.
It is important to note, in the context of the report, that Aon itself is a provider of cyber risk solutions, including insurance.
Meanwhile, the most concerning risk to Australian businesses are threats to brand and reputation.
According to Aon, these threats are particularly noteworthy when considering the ability social media and the news cycle have in creating a “rapid contagion” that can have a lasting impact.
The second highest risk Australian businesses are concerned with, as well as the top risk being felt globally, according to the report, was the threat of economic slowdown.
“Fears for the domestic economy, fuelled by the decline in the property market and electoral uncertainty, have pushed this risk up six places since the 2017 survey,” a statement from Aon noted.
“Australian C-suite executives are concerned about how they will manage potential cuts in capital spending while continuing to invest in innovation to remain competitive in a stalled economy.”
In third place was the prospect of business interruption. This was represented in a number of ways – through alterations to regional and global supply chains, businesses’ increasing vulnerability to cyber attacks and Australia’s perchance for natural disasters.
“In Australia, it’s easy to understand how headlines addressing devastating drought, bushfires, hailstorms, cyclones and floods translate into concerns about revenue stream resilience but we see the same elsewhere around the world, with business interruption moving from number eight globally in 2017 to number four in 2019, the statement from Aon noted.
Increasing competition came in fourth, cash flow and liquidity risks ranked sixth and failure to attract or retain top talent came in seventh.
While talent attraction and retention was a factor that was concerning for Australian businesses, when looking at the global risks, it left the top 10 for the first time in the survey’s history.
Its comparatively higher regional ranking was due in part to Australia’s size and changes to red tape, according to Aon.
“As an isolated geography with a limited talent pool, Australian businesses are finding themselves operating in a difficult environment, with recent changes to sponsored employment visas limiting organisations’ ability to source top talent from overseas,” the statement from Aon read.
“It therefore comes as no surprise that this risk issue should rank higher in the consciousness of Australian business leaders.”
In eighth place was the
failure to innovate and meet customers’ needs, in ninth was regulatory and
legislative changes and in 10th place was accelerated rates of change in market