Advice sought on cyber terrorism threat

The Morrison government is weighing up whether to expand Australia’s terrorism insurance scheme to cover cyber terrorist attacks. The study was revealed in an auditor-general report released on Wednesday which looked at the management of the Terrorism Reinsurance Scheme, which has grown to $13.4 billion since being set up in 2003 in the wake of the September 11 attacks.

Since the scheme was set up there has been one declared terrorism incident in Australia – the Lindt Cafe siege in Sydney in 2014 – which resulted in claims being made by policy holders against their insurance companies. No claims were paid out from the scheme as insurers were able to cover the costs from their individual insurance company thresholds.

An auditor-general report released on Wednesday found the scheme was being managed well by the Australian Reinsurance Pool Corporation. However, the auditor called on Treasury to review the options available to rebuild capital in the scheme – funded through annual premiums paid by the commercial insurance sector and a $10 billion government guarantee – if there was to be an event leading to significant claims on it.

The audit report revealed the ARPC had hired the OECD and Cambridge Centre for Risk Studies to do a year-long research study into the nature and cost of physical damage to commercial property, including business interruption, caused by acts of cyber terrorism.

Source: 9News