Cyber Insurance: 2021 Australian Insurance Market Recap

2021 was a tumultuous period in cyber, with expanded threats, security challenges, and the widespread shift to remote working. Ransomware threats rose, insurance prices increased, and expectations on boards intensified with individual directors under pressure. Insurance remains viable but risk preparedness is essential.

Digital security technology concept for business, lock on circuit board

Cyber threat landscape in review

2021 was a tumultuous period in the cyber risk landscape, with the impacts of expanded threats, security challenges, and widespread changes to the way businesses operate. Investments in technology were tested during 2020 and 2021 when the global pandemic required businesses to re-evaluate the way they worked, from moving large portions of employees to remote work settings, to adapting different processes to adhere to new restrictions and government guidelines. 

Ransomware continued to be a significant concern for companies, flowing on to impact the cyber insurance market in a significant way. Based on data from the Australian Cyber Security Centre (ACSC), Australia experienced a 15% increase in the number of ransomware attacks from October 2020 to October 2021. 

Cyber risk and legislative changes

The publication of the 2020 Australian Cyber Security Strategy signaled an increasing focus by the Australian Government on cyber risk.  And in 2021 the Government announced its Ransomware Action Plan outlining a series of objectives to address cyber risk and crime across three distinct categories. Perhaps the most notable of the Government’s signaled legislative reforms is the mandatory ransomware incident reporting scheme, explained in more detail in our Report below.

Cyber risk and boards

As the threats emanating from cyber security risk grow, a significant challenge is facing company boards who are under pressure to be held accountable for failures to protect information assets and business operations from cyber security failures. Cyber risk moves quickly. There will be increasing expectations of company leaders to maintain a high level of responsibility for cyber risk issues and to have full oversight over its management. 

Cyber claims and cyber insurance

A snapshot of Marsh cyber claims for the first half of 2021 showed that there was nearly a 50% increase in the number of cyber claims compared to the same time period in the previous year. 
Cyber insurance remains a very effective and cost advantageous transfer of this key risk.

Want to learn more?

Download our Report below for more in-depth coverage of the above areas, plus an expert look at: 

  • The leading causes of cyber claims 
  • The industries most affected my ransomware claims
  • Government action and key reforms to watch
  • D&O risk landscape
  • Pricing and coverage trends
  • Lessons in preparedness and proactivity

Marsh has a definitive strategy to support upcoming cyber placements. Using proprietary models, our in depth knowledge of cyber risk and security, and our market leading insight into insurer strategy and appetite, we will drive optimal renewal outcomes for our clients. 

REPORT

Cyber Insurance

2021 Australian Insurance Market Recap Series

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Our Experts

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John Donnelly

Head of Placement, Asia Pacific

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Kelly Butler

Head of Cyber, Marsh Speciality, Pacific

LCPA 22/085

Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238983) (“Marsh”) arrange this insurance and is not the insurer. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). JGS is part of the Marsh group of companies. Any advice in relation to the Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226827) which is a related entity of Marsh. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions. This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements available from JLT Risk Solutions on request. Full information can be found in the JLT Risk Solutions Financial Services Guide.”