Cyber incidents are likely to knock $NZ38 million ($36.41 million) a year from insurance sector profits, or 3% of annual profit for the industry, modelling from the Reserve Bank of New Zealand (RBNZ) shows.

There is also a “non-negligible” chance in any given year these losses could surge to $NZ310 million ($297.02 million), it says. That equates to 25% of the sector’s annual net profit.

“More extreme events have a low probability but are still plausible,” the RBNZ’s “Cyber Incident Cost Estimates and the importance of Building Resilience” report says.

It is important the whole financial sector is aware that cyber threats are “among the most critical tail risk issues we are facing today,” it says.

Historically, more than 60% of cyber attacks on New Zealand organisations target firms in the financial and insurance services sector.