Medibank’s $250m hit big enough to scare others into cyber action

should scare the pants off Australia’s other insurers and banks that are less cashed up and just as vulnerable to a cyberattack.

Few insurers are blessed with the capital buffer at Medibank Private, run by David Koczkar and overseen by chairman Mike Wilkins.So, it’s a stern message from the Australian Prudential Regulation Authority that weaknesses in a company’s IT systems and the wider information security environment will not be tolerated.

The capital charge isn’t forever – analysts reckon it could be around for one to three years based on similar regulatory incidents – but it will crimp Medibank’s options in the near term. If it still wants to do a chunky bolt-on acquisition, for example, it might have to think about issuing tier 2 bonds or other measures.It also had investors thinking about Medibank’s dividend, with the company paying the bulk of its post-tax profits to shareholders each year.

Few are blessed with Medibank’s capital war chest – not even the big listed insurers like Insurance Australia Group and QBE Insurance Group, which do not have the same sort of buffer .

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