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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ASIC issues major cyber guide

ASIC has released a cyber risk and resilience guide to try to give business owners an idea of the cyber risks they may face in the future.

 Link to PDF Checklist at bottom of this article

With a host of high-profile data breaches affecting companies both at home and abroad, ASIC has complied the major new report to try to ensure that Australian companies, insurers and brokers included, remain safe from cyber threats.

ASIC Chairman Greg Medcraft called cyber attacks “a major risk for ASIC's regulated population and that means cyber resilience is an area of ASIC focus".“The electronic linkages within the financial system mean the impact of a cyber attack can spread quickly – potentially affecting the integrity and efficiency of global markets, and trust and confidence in the financial system.“This report outlines some ‘health check prompts’ to help businesses review their cyber resilience – including flagging relevant legal and compliance requirements, particularly on risk management and disclosure.”

The report details the growing importance of cyber insurance for all Australian businesses as the threat of attack continues to rise.“There has been increasing appetite for, and developments in, targeted cyber insurance liability cover. Existing insurance (e.g. business continuity or professional indemnity cover) may not adequately cover the impact of a cyber attack,” the report states.“Considering cyber insurance may be an appropriate business decision based on a company’s risk profile.”ASIC focus on the need for mitigation from cyber attacks as preparing for a cyber threat may not fully protect a company but it can have a positive impact on limiting the effects of an attack and can improve response times to breaches.

“Resilience is more than just preventing or responding to an attack – it also takes into account the ability to operate during, and to adapt and recover, from such an event,” the report says.“Customarily, organisations have focused on protection against cyber attacks. 

However, a resilience-based approach to cyber attacks is vital for organisations to better adapt to change, reduce exposure to risk, and learn from incidents when they occur.“It is in the interest of all businesses to improve their resilience to cyber risks.“Due to business, technological and financial interconnectedness, improving the resilience of one organisation can be a small step in improving the cyber resilience of all.

 The full report can be found here.

Article Extracted from IBO 2015.03.23

 
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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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