The Australian government’s terrorism reinsurance agency, Australian Reinsurance Pool Corporation (ARPC), has commenced a 12-month research study on the threat of cyber terrorism in Australia.
The study will aim to identify and explore current and prospective threats, and assess the practicalities of extending insurance coverage to include cyber terrorism in Australia, which is an option the ARPC has been considering for the past year.
The ARPC said that it will focus on the nature and cost of physical damage to commercial property, including business interruption losses.
“Business insurance policies and the ARPC scheme currently exclude coverage for acts of cyber terrorism which affect commercial and high value residential property in Australia,” said Christopher Wallace, ARPC’s Chief Executive.
“ARPC expects the cyber research study findings to inform development of government policy in this important area, including the three-year review of the terrorism insurance scheme by the Treasury,” Wallace continued.
He added that the research study would make a significant contribution to the data set and knowledge of cyber terrorism risk in Australia, which is currently under-researched.
ARPC has commissioned the Cambridge Centre for Risk Studies and the Organisation for Economic Co-operation and Development to undertake the research, both of which have extensive knowledge of terrorism insurance and risk pools, as well as experience in cyber terrorism research.
“Cambridge Centre for Risk Studies and the OECD are well qualified to undertake this vital research and we look forward to working with them,” Wallace said.