What the Qantas breach means for Australian SMEs: Key insights from Cyber Threat Insure’s Kristopher Mudd

We were recently featured in Insurance Asia News—here are the key points you should know

Highlights at a glance:

• Third-party weakness: The breach stemmed from a vendor platform rather than Qantas’ internal systems, underscoring supply-chain exposure.

• Hidden price tag: Initial loss estimates sit at AU $15–40 million, yet our Chief Insurance Officer Kristopher Mudd projects a long-term bill north of AU $250 million once fines, litigation and brand damage are counted.

• Premium pressure ahead: With losses mounting, insurers will tighten terms and pricing; businesses without robust cover could pay twice—first in a breach, then at renewal.

• SME relevance: If Australia’s flagship carrier can be compromised, smaller enterprises with leaner security stacks are far easier targets.

Qantas breach: what happened?

On 1 July 2025 Qantas disclosed “unusual activity” linked to a third-party contact-centre platform, exposing data from roughly six million frequent-flyer accounts. No payment cards, passports or financial records were taken, but the scale alone places the incident among Australia’s largest breaches since Optus in 2022.

Likely financial impact

Market sources quoted by Insurance Asia News suggest insured losses of AU $15–40 million for breach response and notification; if the airline’s policies respond. Because the intrusion occurred on a vendor system, insurers may argue the loss belongs under the supplier’s cyber or professional-indemnity cover.

“The insurers for Qantas would be putting some fairly high reserves on the policy in anticipation of notifications from frequent flyer accounts.”
— Kristopher Mudd, Chief Insurance Officer at Cyber Threat Insure

“This includes—but is not limited to—possible fines and penalties, potential future damages, cyber-security and tech remediation, and brand damage.”
— Kristopher Mudd

Mudd’s long-range view: overall costs could exceed AU $250 million once regulatory enquiries, potential class actions and reputational repair are tallied.

Third-party vendors: the soft underbelly

Investigators believe the Scattered Spider threat group exploited the contact-centre platform. As Andrew Taylor of MSIG Asia notes, sophisticated actors increasingly leverage social-engineering to pivot through supplier networks. Strengthening vendor governance, role-based access and continuous monitoring is now board-level hygiene.

What it means for cyber liability premiums

“I believe that cyber liability insurance will start to draw a hard line in the sand and say that enough is enough. The premiums are too low. If they are kept at this level, they will not sustain the losses incurred. The Qantas breach will be the cherry on top.”
— Kristopher Mudd

While some underwriters argue abundant capacity will hold rates steady, history suggests headline breaches accelerate a market correction. Expect tighter wordings, higher deductibles and sharper underwriting questions—especially around vendor-risk management.

Lessons for SMEs

“Qantas is a benchmark of Australian corporations as it does most things from their forecasting and outlook to their corporate governance in such a conservative and mature manner, with a lot of foresight; if a company of that size can be breached, any SME can be breached much more easily and quickly.”
— Kristopher Mudd

Smaller enterprises often run lighter security stacks and depend heavily on external platforms. A layered approach, technical controls and a well-structured cyber liability policy, remains the most practical defence against financial shock.

This article was originally published by Insurance Asia News. Access to the full version requires an active subscription.

About Cyber Threat Insure
Cyber Threat Insure is an Australian broker of cyber liability insurance tailored for the clients of Managed Service Providers (MSPs). Founded by an MSP owner and an insurance expert, Cyber Threat Insure aligns cybersecurity controls with insurance protection. Policies integrate into existing frameworks, with the ability to cover core risks like ransomware, phishing, and data breaches, amongst others. We help businesses recover while enabling MSPs to enhance security strategies, manage compliance risks, and deliver secure solutions so MSPs can strengthen client protection without taking on insurance advisory liabilities. For more information, visit cyberthreatinsure.com

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