Australian insurers fear cyber risk more than their global counterparts do, indicating there is still much to be done in terms of mitigation, according to the head of insurance at PricewaterhouseCoopers (PwC).

This year’s Insurance Banana Skins global survey shows Australia’s top-ranked insurance risks are cyber, political interference and reputational damage.

Globally the top three are change management, cyber risk and technology.

The biennial survey questioned 836 insurance practitioners and industry observers in 52 countries on perceived risks over the next two to three years.

PwC partner Scott Fergusson told insuranceNEWS.com.au the fact cyber risk remains at No.1 in Australia – it was also top in the 2015 survey – shows it requires “ongoing attention”.

“To me that indicates it’s perceived to be a disconcerting and evolving risk that insurers are yet to feel they have adequately mitigated,” he said.

“The takeaway is there is more work to be done to feel more confident around cyber risk.”

Mr Fergusson says political interference and reputation rank high in Australia due to increased regulatory scrutiny in the sector.

“The Government is requiring regulators to take more action to address concerns surrounding consumers being fairly treated from a price perspective,” he said.

There has also been negative public attention surrounding claims issues in life insurance and the Australian Securities and Investments Commission’s focus on add-on insurance – a point highlighted two weeks ago in a speech by Australian Prudential Regulation Authority Executive Member Geoff Summerhayes.

“This is why I think the issue around trust in the insurance industry still has a way to go to be addressed,” Mr Fergusson told insuranceNEWS.com.au.  

“This industry and individual players need to keep working hard to address the current perception and turn the narrative on the positive contribution insurers make to Australia and Australians.”

He says regulation was the top risk in the global survey three times in a row, but has now dropped to six, largely because the Solvency II reform has been implemented in many regions.

Results from the global survey rank interest rates at four, followed by investment performance, regulation, macroeconomy, competition, human talent and guaranteed products.