Australia has decided to leave out protection for cyber incidents from its Terrorism Insurance Act following a review into the $13.4 billion scheme, according to reports from itnews. Managed by the Treasury’s Australian Reinsurance Pool Corporation (ARPC), the Terrorism Insurance Act provides cover for losses involving commercial property, business interruption losses, and public liability. However, it does not currently protect against cyber terrorism incidents, which are excluded alongside nuclear attacks, acts of war, radiological damage and property owned by state or federal governments. In its latest review of the Act, the Australian National Audit Office (ANAO) acknowledged an increase in the frequency of malicious digital activity. However, it concluded that “there is yet to be a clear and evident market failure in relation to physical property damage from cyber terrorism requiring government intervention through the Act at this time”. Ahead of the next review in three years’ time, the ARPC will undertake a 12-month study into the nature and cost of physical damage to commercial property caused by acts of cyber terrorism, itnews reported. “The study will identify and explore current and prospective threats, likely scenarios as well as the practicalities of extending insurance coverage to include cyber terrorism in Australia,” the ANAO said. The Criminal Intelligence Commission currently estimates that the direct cost of cyber attacks on the Australian economy totals around AU $1 billion each year.
The Australian National Audit Office (ANAO) has omitted cyber coverage from the Terrorism Insurance Act following its most recent review. Although the ANAO admitted there had been an increase in "malicious digital activity" , it concluded there was no "clear and evident market failure" linking cyber terrorism with physical property damage requiring government intervention "at this time". In a report released on Tuesday, the agency said that while cyber-attacks were becoming more sophisticated, they did not pose as significant of a threat to Australia's financial system or economy as previously thought.