NZ firms reducing cyber cover as premium prices surge – report

NZ firms reducing cyber cover as premium prices surge – report | Insurance Business New Zealand

Cyber

NZ firms reducing cyber cover as premium prices surge – report

“When it comes up for renewal, people are finding a shock when the cost of the insurance is going up”

Skyrocketing premium prices are forcing businesses to reduce their insurance cover, as revealed by global accounting firm Grant Thornton’s biannual business survey.

The rising frequency of scams and its consequences has also caused a rise in the number of claims and payouts which dominoed further into customer premiums, Grant Thornton partner Greg Thompson said.

“When it comes up for renewal, people are finding a shock when the cost of the insurance is going up,” Thompson said in a report. “There’s a de minimis or an excess, where you go and say, ‘I’ll take care of that part of it myself’. So maybe I take cyber insurance for the big attacks but I can protect myself by getting the up front processes right.”

The study revealed that 41% of business owners in the country undertake planning for fraud risk; however, Thompson said that this number should be a lot higher. He urged firms in Aotearoa to be more vigilant, especially with regards to scams and frauds that are becoming more and more common.

“A lot of online scams are pretty obvious. Your bank isn’t going to send you emails about your balance expiring soon. And you know the IRD isn’t going to send you a text to transfer your tax rebate,” he said. “However, the types of scams most likely to affect New Zealand businesses are considerably more sophisticated. They’re also increasing in frequency and surprisingly convincing; so it’s concerning to see that less than half of survey respondents in our research plan for this type of risk.”

Invoice fraud, in particular, is on the rise as scammers are creating fake bills in the name of regular suppliers. Because they look familiar, these fake invoices lure unsuspecting people to send their money to the scammers’ bank accounts.

That said, Thompson did add that simple precautions like having phone conversations to confirm bank account numbers as well as email addresses go a long way towards preventing fraud.

“It’s important to take the time to establish a process for verifying any new details a vendor gives you, like bank account numbers and email addresses, and to always check information changes over the phone, rather than in an email,” he said. “Because all fraud involves a human element, employees should be trained to recognise common red flags such as unusual email addresses, grammatical errors, or unexpected changes in payment instructions.”

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