AUSTRIA Law and Practice Contributed by: Philipp Scheuba, BLS Rechtsanwälte GmbH
12. Developments in Insurance Law 12.1 Significant Legislative or Regulatory Developments Both internationally and nationally, there has been a significant increase in cybercrime in recent years. While in 2017 around 16,800 cybercrime offences were reported in Austria, this figure had risen to over 65,864 by 2023. With increasing digitisation, not only is entrepreneurial activity shifting to the “digital world”, but criminal organisations are also adapting their actions to the changed circumstances. The Cybercrime Report 2024 shows that cybercrime in Austria remains at historically high levels: 62,328 offences were reported in 2024 (–5.4% v 2023), with a clearance rate of just 31.7%. Internet fraud still accounts for more than half of all cases, including a surge in AI-driven scams and EUR-million-scale investment fraud. Ransomware attacks decreased to 109, but forensic data volumes rose sharply to 2,075 TB, underscoring the growing complexity of digital investigations. The steady increase in cyber incidents has made the need for comprehensive insurance protection more and more apparent in recent years. In many cases, it is only when specific incidents occur that entrepreneurs realise that while “classic” insurance products may offer a certain level of protection, there are notable – and at times, very serious – gaps in coverage. The insurance industry has responded to the increased need for protection against cyber incidents by launch- ing a wide variety of products. In some cases, these have been based on standard insurance products and corresponding extensions or “additional modules” have been formulated to provide supplementary pro- tection against “cybercrime”. On the other hand, there are concepts that are primarily “tailored” to cyber inci- dents. The Network and Information Security Directive (NIS2 Directive) which entered into force on 16 January 2023 and replaces the NIS 1 Directive, is expected to tight- en regulations and expand contractual obligations in the insurance industry (particularly in the area of cyber insurance and D&O Insurance). This in turn will result
insurance company, the FMA is not the competent supervisory body.
11. Emerging Risks and New Products 11.1 Emerging Risks Affecting the Insurance Market Following international trends, insurance contracts relating to cyber-risks (such as data theft and phish- ing mails) have recently become increasingly popular in Austria. Other emerging risks that affect the insurance market are the consequences of global warming and associ- ated natural disasters and technological change. The demand for insurance covering these risks is high, although some risks face extreme difficulties in being insured in the future. Artificial intelligence (AI) is also a growing concern for the global insurance industry. The EU Artificial Intelligence Act – in force since August 2024 and phased in through 2027 – introduc- es a new compliance layer for insurers deploying AI in underwriting, pricing, fraud detection, claims han- dling or distribution. High-risk systems will face strict governance, documentation, data quality and human oversight requirements, while certain manipulative or discriminatory AI practices are outright prohibited. Although supervisory practice is still emerging, insur- ers must already map and classify their AI use cases and ensure that model governance and internal con- trols are sufficiently robust to meet the Act’s stand- ards. 11.2 New Products or Alternative Solutions With regard to the introduction of new insurance prod- ucts relating to cyber-risks, a top-down development can be observed. Whereas cyber-insurance was ini- tially subscribed mainly by large-scale enterprises, insurance undertakings in Austria have also begun to explicitly target small and medium-sized enterprises as potential customers. Furthermore, the Austrian insurance market has recently seen the introduction of retail cyber-insurance products explicitly tailored to the needs of private persons, including coverage for damages suffered through the use of online shop- ping tools.
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