Cyber-attacks could cost New Zealand’s insurance sector losses of $38 million every year according to the Reserve Bank of New Zealand (RBNZ).
Part of an expanding programme of work on risks to the financial system, Cyber incident cost estimates and the importance of building resilience, examines the financial sector’s resilience to cyber threats and estimates the potential costs to the country’s financial system.
The report’s authors estimate the cost of cyber incidents of $38 million annually for the insurance sector and $104 million a year for the banking sector,, or the equivalent of 2-3% of annual profits for the two industries.
The modelling also indicates that in any given year there is a 5% chance the costs could exceed $2.3 billion a year.
The report’s authors estimate the cost of cyber incidents of $38 million annually…
The RBNZ says that while quantifying these costs is difficult, the findings indicate the financial cost has the potential to be significant. The study did not consider costs such as the possible loss of confidence in the financial system.
The country’s cyber-security agency CERT NZ found more than 60 percent of cyber-attacks on New Zealand organisations in 2018 targeted the financial and insurance services sector.
The RBNZ says that with the frequency and severity of cyber security incidents on the rise, the study highlights the importance of the financial sector remaining vigilant and managing cyber risks effectively.
The RBNZ is developing risk management guidance and promoting information-sharing in collaboration with industry and other public organisations.