American International Group (AIG) has reported an 87 percent year-on-year increase in enquiries for cyber insurance policies in Asia, and a 38 percent increase in requests globally. They have attributed this growth to the ‘WannaCry’ ransomware attack earlier this year, which affected more than 200,000 organisations in 150 countries.
While cyber insurance itself cannot prevent breaches, it has become an important tool in helping organizations recover from attacks and mitigate the impact on business continuity in all aspects of trade and reputation. In the UK, for example, fraud and cyber offenses make up 47.3% of all crime. The average total organization costs of a data breach in the UK rose to $3.9 million in 2016. Yet, just 3.7% of UK SMEs hold cyber insurance.
In Asia, companies have been slow to respond to the threat posed by cyber attacks. Insurance market specialist Lloyd's and risk modelling platform Cyence published a report in July, which looked at the global cost of cyber attacks on businesses. The report says Asia “continues to be under-insured and economically vulnerable to such attacks.”
"The market is still young, and many businesses do not recognise the role that insurance can play in mitigating economic losses from cyber attacks in areas such as incident response, business interruption and loss of business," said Kent Chaplin, chief executive of Lloyd's Asia-Pacific.
The latest figures from AIG suggests the companies are now making efforts to catch up.
The big increase means the organizations are aware they really need protection," said Cynthia Sze, head of an AIG business in Greater China, told Reuters. Citing Hong Kong police statistics as an example, Sze said computer security incident reports have risen to about 6,000 last year from 1,500 in 2009. She said financial losses resulting from cyber attacks rose to HK$45 million ($5.76 million) in 2016.
"WannaCry has really changed the dynamics. We used to tap large multinational companies that understood where the exposure was. Now we are really talking about mid-market and SMEs,” said Jason Kelly, AIG’s head of liabilities and financial lines for greater China, Australasia and South Korea.
Stay up-to-date with the latest trending news stories and industry advances with the Research and Markets blog. Don’t forget to connect with us on LinkedIn and Twitter for the latest blog plus information about new products.