News & Analysis

Cyber risk insurance product launched by Allianz

- March 31, 2014 2 MIN READ

As technology advances, so too does crime. And the tools used to commit crimes are advancing as rapidly as digital devices are. But one thing hasn’t changed – a criminal’s acumen and dexterity when it comes to the act of the crime. Today, cybercrime and data breaches costs the Australian economy over $1 billion and the global economy $120 billion per year.

Allianz’s 2014 Risk Barometer report found that the risks associated with cyber crime, IT failures and espionage ranked fifth for Australian business – whereas last year, this category of risk didn’t even make the top 10. Loss of reputation or brand value ranked third in 2014, up from fifth in 2013.

Businesses are being targeted by criminals using highly sophisticated cyber attacks such as denial of service (DoS), botnets, worms, spear phishing and drive-by exploits. The consequences of these attacks can be devastating for a business – despite what stage they’re in. 

“Irreversible damage can be done to a brand’s reputation if they do not have risk management and mitigation strategies in place to combat a data breach,” said Holger Schaefer, General Manager of Allianz Global Corporate & Specialty (AGCS) Pacific.

“Moreover, the digital age has increased vulnerability with the potential for reputational harm via social media, which can carry information across the globe instantly.”

In response to this growing phenomenon, AGCS has launched Allianz Cyber Protect to the Australian market. Allianz’s suite of three insurance products allows businesses to protect themselves against cyber criminals, data loss and the potential ramifications, with cover up to a limit of $50 million.

According to Schaefer, reputation is an “intangible asset” yet “a decisive factor in a businesses’ future success. As such, “all businesses need to review their vulnerability to cyber attack and the financial and reputational damage it may cause”.

“Companies are facing attacks on a daily basis and firms, such as online retailers that have a critical dependency on digital networks, may not be fully aware of how a cyber attack could be fatal to their business.”

“Many cyber criminals are now hacking into the systems of SMEs as a way of ‘piggy-backing’ access to the systems of the larger companies they partner with.”

Allianz Cyber Protect clients also have immediate access to a crisis response team, which includes a panel of forensic IT experts who will work with them to manage a cyber incident.

The insurance company has partnered with global consultants KMPG Forensic, Dell SecureWorks, Incoming Thought Ltd and E-merging Technologies Group Inc to provide a high level of claims support.


Image source: Shutterstock.