More than half of Australian companies are unprepared for cyber attacks, and insurance is an important part of the solution, according to Ernst & Young (E&Y).

The professional services provider’s Global Information Security Survey found 80% of respondents believe they face an increased cyber threat, but 51% say their organisation would fail to detect a sophisticated attack.

For the first time in 17 years the survey shows external attackers are considered more of a threat than rogue insiders.

E&Y says companies lack the agility, budget and skills to properly address cyber security.

Oceania Information Security Leader Mike Trovato told insuranceNEWS.com.au insurance should form part of any solution.

But he says insurers must constantly evolve their products to fit the ever-changing cyber landscape.

“What seemed sound yesterday may not be today. Cyber crime is not a fixed environment.”

He says take-up of cyber cover is still relatively low, despite the growing threat.

“When I talk to clients, many of them are not carrying these kinds of policies. But there is more talk about it than there used to be.”

Mr Trovato says governments have a crucial role to play helping businesses combat cyber crime.

“While organisations need to do a better job of anticipating attacks because of the serious and sometimes catastrophic breaches of critical corporate and personal information, we have to think more broadly about organisational resilience,” he said.