In any given week I will speak with at least 20 customers. Our customers tend to be small and medium businesses together with a smattering of larger and public companies.
So when I bring up the topic of cyber crime, I’m regularly told: “It won’t happen to us.”
Here are some of our customers’ quotes:
- “This is not really an Australian problem and we’re not Sony.” (Hackers stole Sony data causing embarrassment, a $15m clean-up bill and significant brand damage.)
- “We’ve never had a Privacy Act breach.”
- “We don’t trade online…therefore it’s not really actually an issue.”
- “We have the best systems and/or controls and/or people so we are well protected.”
- “We’ve been in the business xx years, and have not had a problem.”
In Australia, are we in denial?
Most businesses hold sensitive information (customer, suppliers or employees) and therefore could be liable for a data breach (think Privacy Act and more). Most have an online presence including websites and social media. Most are reliant on IT systems/processes to some degree and without them, they couldn’t do business. And anyone can be extorted by hackers.
Andrew Forrest of Fortescue fame announced in September 2016 that a cyber hacker stole $615,000 from their family investment company bank accounts. What is interesting about this case was that Andrew Forrest was prepared to go public. In contrast, customers that I know who have experienced cyber crime have “kept schtum”, perhaps not wanting to be embarrassed or show a (perceived) lack of control.
Someone has it wrong
Yes, these Sherpa Insurance customer quotes are only anecdotal. However, there is another substantive evidence.
I attended an insurance actuary event (believe it or not, it was interesting!) run by Finity. One data point in particular, grabbed my attention. In 2015, the cyber liability insurance spend in the US was $3 billion. Over the same period in Australia, the insurance spend was $30 million.
Yes, compared with Australia, the US market is huge. But to put this in perspective, the spend is $10 per person in the US compared with $1.25 per person in Australia.
This US-Australia spend gap per person is absolutely enormous, so maybe someone has it wrong?
Only time will tell who that is.