Unravelling the Web of Cyber Risk and Insurance Fraud in 2023

October 25th, 2023

Unravelling the Web of Cyber Risk and Insurance Fraud in 2023

In the digital age, New Zealanders find themselves immersed in the ever-evolving landscape of technology. As we navigate this world, it’s crucial to understand the intersection of cyber risk and insurance fraud, two issues that have taken centre stage in recent times. In this blog post, we’ll explore the latest insurance fraud and cyber risk trends in New Zealand, shedding light on the importance of Cyber Smart Week, an annual awareness campaign by Cert NZ, in helping to prevent insurance fraud while fostering a safer online environment for all.

Insurance Fraud Trends in New Zealand (2023)

Insurance fraud has unfortunately become a growing concern in New Zealand. In 2023 alone, there has been a concerning uptick in fraudulent insurance claims related to cyber incidents. According to recent data from Cert NZ, fraudulent claims have increased by 21% compared to the previous year. These incidents range from falsified cyberattack reports to exaggerated damages, costing insurance companies and, ultimately, honest policyholders, thousands of dollars.

Cyber Risk Trends in New Zealand (2023)

New Zealand’s technological landscape is evolving rapidly, but so are the risks associated with it. Cybercriminals have become more sophisticated, targeting businesses and individuals alike. Ransomware attacks, phishing schemes, and identity thefts have surged, leaving a trail of financial and emotional devastation. In our 2022 Cyber Smart Week blog,  we outlined what identity theft is and how it can impact on your ability to get insurance.  Recent reports from the New Zealand Cyber Security Centre highlight a 20% increase in cyber incidents compared to last year, indicating a pressing need for better cybersecurity practices across the nation. 

How is Identity Theft used by Cyber Criminals?

Identity theft is a common tactic used by cybercriminals to commit various fraudulent activities online. Here are several ways in which cybercriminals use identity theft:

  1. Financial Fraud

Cybercriminals use stolen identities to access victims’ bank accounts, credit cards, or other financial accounts. They can make unauthorised transactions, open new accounts, or apply for loans and credit cards in the victim’s name, leading to financial losses for the victim.

  1. Online Shopping Fraud

Stolen identities are often used to make online purchases without the victim’s knowledge. Cybercriminals create accounts on e-commerce websites using the stolen identity and then use stolen credit card information to buy goods and services, which are delivered to different addresses to avoid detection.

  1. Phishing Attacks

Cybercriminals use phishing emails or fake websites to trick victims into providing their personal and financial information, such as usernames, passwords, and credit card numbers. This stolen information can then be used for various malicious purposes, including accessing bank accounts or committing fraud in the victim’s name.

  1. Tax Fraud

Stolen identities are sometimes used to file fraudulent tax returns to claim refunds. Cybercriminals use the victim’s personal information to file a tax return, ensuring that the refund is sent to an account controlled by the criminals.

  1. Medical Identity Theft

Cybercriminals use stolen identities to obtain medical services, prescription drugs, or health insurance coverage. This can lead to victims receiving incorrect medical bills or having their medical records altered with potentially serious consequences for their health care.

  1. Social Engineering Attacks

Cybercriminals can use stolen identities to impersonate the victim and manipulate individuals or employees within organisations. They may request sensitive information or attempt to initiate fraudulent transactions by posing as someone the victim knows or trusts.

  1. Criminal Activities

Stolen identities can be used to create fake documents, such as passports or driver’s licenses, which can then be used to commit various crimes, including illegal border crossings, human trafficking, or terrorism-related activities.

To protect against identity theft, individuals should be cautious about sharing personal information online, use strong and unique passwords for different accounts, enable two-factor authentication, and regularly monitor their financial and online accounts for any suspicious activities. Additionally, organisations need to implement robust cybersecurity measures to protect customer data and educate employees and customers about the risks associated with identity theft and phishing attacks.

The Importance of Cyber Smart Week

Amidst these concerning trends, initiatives like Cyber Smart Week by Cert NZ are indispensable. Taking place annually, Cyber Smart Week aims to educate Kiwis about online threats and best practices for staying safe in the digital realm. This campaign plays a pivotal role in preventing insurance fraud by raising awareness about the latest cyber threats and how to avoid falling victim to them.

Cert NZ offers a wealth of resources, from informative articles to interactive workshops, all designed to empower individuals and businesses with the knowledge they need to protect themselves online. By promoting a culture of cybersecurity consciousness, Cyber Smart Week not only reduces the risk of cyber incidents but also discourages insurance fraud attempts. When people are cyber smart, it significantly diminishes the opportunities for cybercriminals to take over online accounts, and commit identity fraud. 

Statistics Speak Louder Than Words

Recent statistics reveal the efficacy of Cyber Smart Week. In the past year, Cert NZ reported a 30% decrease in reported cyber incidents during the week of the campaign compared to the same period in the previous year. This decline underscores the impact of awareness initiatives in reducing the vulnerability of individuals and organisations to cyber threats.

Moreover, studies show that individuals and businesses that actively participate in Cyber Smart Week activities are 50% less likely to fall victim to phishing scams and identity thefts. This tangible outcome emphasises the importance of education and proactive engagement in the fight against cybercrime and insurance fraud.

A Collective Responsibility

Preventing insurance fraud and mitigating cyber risks are not tasks for individuals or organisations alone. It’s a collective responsibility that involves every New Zealander. By staying informed, practicing good cyber hygiene, and participating in initiatives like Cyber Smart Week, we can create a safer digital space for ourselves and future generations.

The intertwining web of cyber risk and insurance fraud demands our attention and action. As New Zealanders, we must equip ourselves with knowledge, leverage available resources, and actively participate in campaigns like Cyber Smart Week. Together, we can build a more secure online environment, safeguard our finances and personal data, and ensure that the digital future of our beautiful country remains bright and promising. Let’s embrace the power of awareness and education, standing united against the threats that lurk in the vast expanse of the internet.

For more information on Cyber Smart Week and resources on how to stay Cyber Smart, visit Cert NZ, and let’s make New Zealand a safer place for everyone.