Cyber attacks could cost New Zealand’s insurance sector around NZ$38m ($24m) a year, according to a central bank bulletin article.
In addition, the Reserve Bank of New Zealand (RBNZ) bulletin says that the indicative average cost of cyber incidents is NZ$104m a year for the banking sector.
The figures are the equivalent of 2-3% of annual profits for the two industries.
The modelling also indicates that in any given year there is a 5% chance the costs could exceed NZ$2.3bn a year.
Cyber incident cost estimates and the importance of building resilience are part of an expanding programme of work on risks to the financial system.
While quantifying these costs is difficult, the findings indicate the financial cost has the potential to be significant. The study did not capture any additional costs such as the possible loss of confidence in the financial system.
The country’s cyber security agency CERT NZ found more than 60% of cyber attacks on New Zealand organisations in 2018 targeted firms in the financial and insurance services sector.
With the frequency and severity of cyber security incidents on the rise, the study highlights the importance of the financial sector remaining vigilant and managing cyber risks effectively.
The Reserve Bank is strengthening its efforts to enhance the resilience of the financial system from cyber threats, including developing risk management guidance and promoting information-sharing in collaboration with industry and other public organisations.