Cyberattacks are rising worldwide, and the real estate industry is in the crosshairs. One example: an attack on a UK service provider in late 2023 left hundreds of agents unable to process sales for days. Though this incident happened on the other side of the globe, it holds lessons for Australia’s real estate community, particularly as cyberattacks on SMEs continue to climb down under.
Why real estate agents?
Cybercriminals love to target small businesses because they are often poorly protected against cyberattacks compared to larger corporations. Data from the Real Estate Institute of Australia (REIA) estimates that 99% of the nation’s real estate agencies are small businesses, meaning the industry is broadly at risk.
However, the nature of real estate also makes these businesses compelling cybercrime targets.
Real estate agents typically have large client lists filled with sensitive information that can be used to steal identities, initiate fraudulent transactions, or target further individuals. They also deal in high-value transactions, making them potential targets for false billing scams. These cons cost Australians nearly $28 million in 2023 and were the third most reported incident that year, according to Scamwatch.
The time-sensitive nature of real estate also makes the industry a strong target. An agent locked out of their system by ransomware may feel they have no choice but to pay the ransom to meet crucial deadlines. Ransomware accounted for 10% of all incidents reported to the Australian Signals Directorate (ASD) in 2023.
The importance of prevention
Staying ahead of cybercriminals is a challenge for many SMEs. However, small steps can help protect real estate agents and their businesses:
- Learn how to spot common cyber scams and threats. Our Cyber Threats Unveiled guide is a useful resource for educating SMEs and their staff.
- Protect your systems. Anti-virus software, firewalls and installing security updates as soon as possible can secure computers and mobile devices.
- Regularly back up business files. If data loss does occur, a recent backup file can be used to rebuild the system.
Preventing cyber incidents also helps SMEs avoid unnecessary Cyber Liability claims, which can help them avoid some policy increases.
Cyber Liability: Overcoming clients’ objections
Selling Cyber Liability insurance to SMEs can be challenging, partly because many small business owners simply do not see themselves at risk of a cyberattack.
However, brokers working with real estate agents and agencies may find less resistance on this point. In a December 2022 survey by the REIA, cybersecurity ranked third out of 27 key issues affecting members’ businesses.
Small real estate agencies typically have fewer resources to prevent cyberattacks and manage their fallout. Another REIA survey found that while 60% of large agencies regularly updated their systems and software, just 31-34% of smaller ones did the same.
For these clients, the 24-hour incident response services offered with Cyber Liability policies could become a strong selling point, as they provide crucial resources for containing and reducing the impact of cyberattacks.
While many real estate agents may see the wisdom in having a Cyber Liability policy, price might still be a primary objection. Here’s where brokers can hit them with the stats—the ASD saw an average increase of 14% per cybercrime report in 2023. That’s an average of $46,000 per incident for small businesses and $97,200 for medium ones.
BizCover for Brokers’ Cyber Liability offering
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