FY21 Q3 & Q4: Cyber Insurance Snapshot

• Q3/Q4 had 446 reported breaches — down 16% from Q1/Q2.
• Malicious or criminal attacks caused 65% of reported breaches. Of these, 66% were cyber incidents.
• Human error was the second-highest cause of data breaches. It accounted for 30% of breaches reported.
• Health service providers reported the highest number of breaches (19%), followed by the finance & superannuation industry (13%.)

• The overall reduction in breaches included a 34% drop in human-error breaches and a 5% drop in breaches caused by a malicious or criminal attack.
• However, two types of malicious or criminal attack related breaches are on the rise. Ransomware incidents increased by 24%, from 37 to 46. Breaches caused by social engineering or impersonation fraud increased slightly, from 34 to 35.
• Following the report, the OAIC issued a press release highlighting ransomware attacks and impersonation fraud as causes for concern.

• Protect themselves adequately from privacy threats.
• Have systems in place to quickly identify breaches.
• Have appropriate incident response plans.

This expectation extends to the threat of ransomware attacks and impersonation fraud. The Australian Information Commissioner and Privacy Commissioner Angelene Falk says:

We expect entities to have appropriate internal practices, procedures and systems in place to assess and respond to data breaches involving ransomware.

Entities should continually review and enhance their security posture to minimise the growing risk of impersonation fraud.

• Multi-factor authentication.
• Automatic account holder notification for failed logins and personal information updates.
• Appropriate audit and access logs.
• An appropriate incident response plan.
• Possible early-stage forensic analysis from a cyber security expert following a ransomware attack.

This is part of the reason that KBI’s lead cyber insurance broker Tyler Speers recommends pairing robust privacy protection measures with an equally robust cyber insurance policy:

Given the growing risk of ransomware and impersonation fraud, Speers recommends that all businesses who hold personal data seek cyber insurance. He also suggests that businesses with an existing policy have a proactive conversation about risks and cover requirements with their broker.

• Ransomware and impersonation fraud is a growing threat
• Businesses should look to improve privacy protection measures and have a plan in place for cyber attacks.
• Businesses should speak to their broker about the financial risks associated with a cyber attack and the possibility of transferring those risks to insurance.