Cyber criminals may target New Zealand due to the country’s high proportion of “woefully underprepared” small businesses, insurers have warned.

An Insurance Council of New Zealand (ICNZ) survey reveals three-quarters of residents believe businesses are not set up to manage computer hacking and to keep data secure.

CEO Tim Grafton told insuranceNEWS.com.au that while large businesses often carry out detailed risk assessments, smaller companies are much less likely to do so.

“A large proportion of New Zealand businesses are very small – about 85% employ five or fewer people – and they will have very low levels of cyber-risk awareness,” he said.

“Those [cyber attackers] that target small businesses will look to parts of the world where there isn’t much protection.”

Mr Grafton says the growing number of global attacks, combined with a lack of awareness, is “a recipe for disaster for some businesses”.

Cyber-related crime is estimated to have cost New Zealand businesses more than $NZ625 million ($556 million) in 2011, and a recent PricewaterhouseCoopers report found incidents increased by 48% last year.

ICNZ data reveals 29% of businesses have no insurance at all, and “a very high percentage” will not have cyber cover.

Mr Grafton encouraged businesses to take out cyber insurance, while stressing the importance of risk management strategies.