Small Business urged to take action on cyber cover

 It is time for action on cyber insurance, one expert has said, as risks continue to mount.

A recent global survey conducted by Zurich found that Australian SMEs are more aware than ever of the threat of cyber breach and Callum McMillan, national commercial manager for Financial Lines for Zurich in Australia, said small businesses can no longer afford to bury their heads in the sand.

“For SMEs, the time for thinking about cyber insurance protection is over, and it’s now time for action to be taken,” McMillan told Insurance Business.
“No longer can cyber risk be a business issue considered to be the responsibility of IT managers alone. The damage to reputation and the costs associated with the disruption to business are only increasing year on year.

“A number of global surveys have revealed that around 50-60% of companies, who lose data, will cease trading within six months.

“This is an incredibly scary statistic, and one that highlights the severity of a cyber loss for any SME.”

Survey data revealed that, in Australia, the greatest concern related to cyber crime that can be mitigated was damage to reputation (31.5%). Theft of customer data or money came in second and third at 26.5% and 15% respectively, with business disruption ranked fourth having been mentioned by 14.5% of respondents.

McMillan noted that while the cyber insurance market in Australia is “still very much in its infancy” brokers will play a key role in developing the market with the all-important SME client base.

“SMEs are an easy target for hackers, which is why we have seen a significant increase in the frequency of attacks against SME businesses,” McMillan continued.

 “As an insured’s trusted risk advisor, brokers play a critical role in raising awareness and prompting SMEs to take action in order to protect themselves.”

With SMEs making up approximately 97% of all businesses in Australia, according to Government statistics, McMillan noted that it is not only businesses which could be impacted by an attack.

“Many SMEs are financed through their owner’s equity which could mean funding from their family home or potentially funding from friends and family,” McMillan said.

“Therefore, there is a high probability that the owner of an SME business that does lose data could potentially lose both their livelihood and their home too.”

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Assistance company releases shocking Australian travel stats

Allianz Global Assistance has released statistics on the people it has helped over the summer months and the numbers are quite staggering.


The global assistance company came to the aid of hundreds of thousands of Australian’s both at home and abroad.

“Throughout this summer, AGA assisted 268,366 people or 1 person every 30 seconds,” the company said.

AGA noted that holiday-makers made up a large chunk of the help handed out as people often need help whilst abroad.

“While holidays are a good time to explore new tastes and flavours and rediscover your love of sports, they are not risk-free. Indeed, illness, injuries and accidents represented more than 109,552 cases from Australians this summer.”

On a more serious note, the assistance giant helped to organise a number of repatriations throughout the summer showing just how paramount travel insurance can be.

“In total, AGA staff organised 17 repatriations during the three summer months and four air ambulances.”

On the roads, AGA dealt with a vast number of calls and highlighted two key problems that made up the bulk of assistance.

“During December to February, 53,218 calls for assistance were managed by AGA, with over 10,000 enquiries related to battery problems and over 6,000 due to tyre issues.”

Article extracted from IBO 2015.04.13 

Buffett speaks on first Aussie insurer investment

Warren Buffett, CEO of Berkshire Hathaway, has revealed what drove the company to its “strategic partnership” with IAG, which was announced yesterday.

The Oracle of Omaha told investors via video link that IAG offers a “very important and enduring relationship,” that will help establish Berkshire Hathaway in Australia and New Zealand.

“Berkshire is a large, very diversified company here in the United States but despite the fact that we are in a great many businesses, our first love, our long time love and our future love has always been the insurance business,” Buffett said of the investment.

Buffett noted that Berkshire Hathaway have been involved in the insurance business since 1967 where a stake of US$8 million has developed into a multi-national business worth over US$100 billion and that long-term development led the company to IAG.

“In the course of that business, 15 years ago or so, we entered our first commercial transaction with IAG and as the years have passed and we’ve gotten to know them better and they’ve gotten to know us better, we’ve both found a great deal to admire in each other’s organisations.

“Very recently, we decided to cast aside a commercial relationship and establish a very important and enduring partnership arrangement. IAG is a terrifically strong company with great strengths in many areas, Berkshire has got some strengths and we believe by bringing these two companies closer together as partners, that each company will benefit in a very substantial way.

Buffett was quick to note that while the original agreement stretches ten years, Berkshire Hathaway see the IAG investment as a long-term plan to develop business in the region.

“Even though this contract runs for ten years I expect for decades and decades and decades to come that both companies will benefit in many ways that we can’t even perhaps visualise right now, so I’m looking forward to it, our managers are looking forward to it, our shareholders are looking forward to this partnership and I can’t tell you how delighted I am to be with it.”

Managing director and CEO of IAG, Mike Wilkins, stressed that deal will see no great change in the strategy of IAG moving forward as the company continues to look to Asia as a key driver of new business.

“As you heard from Warren, both of us believe that this is a win-win partnership for our respective organisations,” Wilkins said.

“IAG’s strategy and our strategic priorities are essentially unchanged.

“It’s this strategy that Berkshire Hathaway are supporting as they enter into the strategic partnership with us. Our strong businesses in Australia and New Zealand represent the majority of the group and we don’t see that changing.

“These markets continue to contain growth opportunities for us, however we also see continuing opportunities in our target markets in Asia. For all of you, our ambitions in Asia are nothing new and we continue to see enormous potential in the region.”

Buffett, who Wilkins noted was involved throughout the deal process, said that his first Australian investment has been worth the wait.

“One small footnote, in fact it’s sort of a confession, I’m 84-years-old and this is my first investment in an Australian company… it’s been worth waiting for.

“We’ve now picked the best and we’ve entered into an area of the world where we have done some business before but now we are coming in with an ownership position and better late than never and... here we are in Australia and I’m delighted to be here.”

Internet speeds: Australia ranks 44th, study cites direction of NBN as part of problem

One engineering expert said the nation would continue to tumble down in world rankings if the rollout of the National Broadband Network (NBN) continues in its current form.

 Article extracted from abc.net.au

A US study has delivered an unwelcome finding about Australian internet speeds, finding that they are well behind the international pack.

The State of the Internet Report from cloud service provider Akamai ranks Australia 44th for average connection speed.

The US-based company produces the quarterly report looking at connection speeds and broadband adoption around the world.  Dr Mark Gregory, a network engineering expert from RMIT University, said the Akamai report was a reputable review.

"In the latest report, Australia has dropped a couple of places down to the 44th position, which is a pretty big drop really over such a short period of time," he said.

Dr Gregory said Australia's relative decline was because many other countries were moving forward apace with new and upgraded networks.

"The drop is happening because a lot of other countries over this period are moving towards fibre-based access networks, or they've already completed rollouts of what we would call the multi-technology mixing/mixed networks," he said.

"Whatever way you look at it, what it means is that the average speeds that Australians are enjoying are slowly becoming less than most of our competitors around the world."

Copper-based network slowing Australia down: expert

Dr Gregory said the Federal Government's decision to switch from fibre-to-the-home to a mixed fibre/copper network was part of the reason for the decline.

"One of the reasons is that we're falling down the list [is] that we're moving towards utilising a copper-based access network," he said.

"Whereas previously, under the Labor government, we were moving towards an all fibre-based network, which is what most of our competitors are now doing.

Average connection speed by country

1. South Korea
2. Hong Kong
3. Japan
4. Switzerland
5. Sweden
6. Netherlands
7. Ireland
8. Latvia
9. Czech Republic
10. Singapore
44. Australia

Source: Akamai's State of the Internet Report

"And we're also seeing this drop because, as we keep changing direction with the NBN, we're putting in large delays before the rollout is actually occurring."

New Zealand is one of the nations now ranked ahead of Australia, with faster average internet speeds.

Dr Gregory said that was largely because it has stuck with a fibre-to-the-home network.

"The key difference between New Zealand and Australia is that New Zealand made the decision to do fibre-to-the-premise, they've stuck with that decision," he said.

Even though Australia is much larger geographically, Dr Gregory said fibre-to-the-home should be financially viable for a network to cover the vast bulk of the population.

"Fibre-to-the-premise is viable in Australia, mainly because most Australians are clustered around the coast," he said.

"If you look at the density of Australians, then really we don't differ very much from most other countries in the world, we're just a large country, but with the technologies that we've got today to actually roll out fibre systems, the cost is not that different from most other countries in the world."

Quality of streamed video 'much lower' than overseas

Dr Gregory said many households will notice the deficiencies in Australia's internet when they try to watch television over the internet, such as through the Netflix service coming to Australia this year, or its local rivals.

"Even though the suppliers say they are giving us high definition of 4K steaming, to actually be able to stream over Australia's connection and our connections will be a lot slower than the rest of the world," he said.

"What they will do is that they will increase the compression ratio on the video.

"Even though they are saying that we are getting high definition, or 4K TV, the actual compression will be far more in other countries and therefore the quality of the video that we are viewing at home will be much lower."

Dr Gregory added that another development may push Australia even further down the rankings for internet speed.

"The most important change is occurring in the United States where the FCC chairman - and that's their body that looks after telecommunications - has decided to redefine broadband to 25 megabits per second download speed," he said.

"So what that means is that, in Australia, the Government has been saying that they're going to provide every Australian with high-speed broadband.

"In the future they'll be able to say that they're providing Australians the bare minimum broadband under the new FCC determination on what broadband will be called.

"For many other countries around the world of course, they're moving towards gigabit broadband now and that is super-fast broadband under the new definitions."

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