A risk expert has called for increased collaboration between the insurance industry and a range of parties to counter Australia’s increasing vulnerability to cyber risks.

Swiss Re Head of Client Management Property and Casualty Australia and New Zealand Andre Eisele says the digital transformation of society and hyperconnectivity of devices, systems, machinery and infrastructure “is widening the source of vulnerability”.

Commenting on the publication of a new Swiss Re Sigma report on cyber risks, he told insuranceNEWS.com.au that “in terms of risk transfer, quantifying cyber risk continues to pose a significant challenge”.

“The lack of historical data, the rudimentary understanding of risk drivers, the human motivation factor, the rapid pace of technological change and of course interconnectedness [are] leading to unquantifiable accumulation potential,” he said.

“Cyber risk management in Australia is therefore becoming a greater concern for governments and business.”

He says Australian organisations need to establish a first line of defence by institutionalising cyber security through comprehensive plans.

“Cyber resilience includes not only technology but also educating employees about the landscape that contributes to the cyber threat.

“Surprisingly, 46% of systems that were reportedly compromised had no malware.”

While insurance plays an important role in building cyber resilience, Mr Eisele says it requires “a harmonious marriage arrangement” between organisations and insurers, with “mutual trust and a robust exchange of information”.

“The collective approach will led to greater understanding of cyber risks and allow insurers to offer more flexible and tailored solutions,” he said.

“A multi-partisan approach is required between government, IT vendors, cyber security experts, legal advisers and the insurance market, to strive for a deeper understanding of cyber risk drivers and to assess, mitigate, and transfer risks to those best placed to respond.”

“Cyber: getting to grips with a complex risk” can be downloaded here.