The cyber insurance market in Asia could potentially grow to reach $1bn in premiums by 2025, according to Delta Insurance Managing Director Ian Pollard.
Speaking at the 3rd Asia Cyber Summit in Singapore yesterday organised by Asia Insurance Review, Delta Insurance – a Cyber and Technology Lloyd’s Coverholder in Asia – said now is the best time for corporates to buy cyber cover as rates are bound to harden as insurance companies acquire more data around cyber risk.
Mr Pollard estimates that less than 5% of businesses in Asia hold specific cyber insurance policies, compared to 14% in Australia and 10% in New Zealand respectively. He added that data breaches are set to become more common, noting that half of Delta’s cyber claims currently relate to malware.
In terms of evolving threats, he highlighted the dramatic rise of ‘cryptojacking’, which is the practice of hijacking computers to mine cryptocurrency. Cryptojacking saw an 85-fold increase in 4Q17 which coincided with the spike in bitcoin prices.
Commenting on the modern risk landscape today, Guy Carpenter’s Managing Director, Head Casualty Specialty Practice (Asia-Pac), Thomas Herde, said that companies are currently covered for only 15% of potential cyber-risk losses, against 59% for property, plant and machinery losses.
Given the worth of intangible assets today compared to traditional physical assets, companies ought to do more to protect themselves against ‘intangible risks’ such as reputational risk, he said.
From a risk management perspective, he also noted how insurance companies should be aware of the prospect of overlapping cyber liabilities from the traditional classes they underwrite.
In the absence of a special clause it is often extremely difficult to determine first, whether all losses have arisen from one event or cause, and secondly, precisely what that event or cause is. Therefore for cyber, the only sensible way of resolving the difficulty is by having recourse to an aggregate reinsurance structure which does away with the necessity of looking for a single common underlying event or cause.
“It is prudent to have an overarching cover in case specific event covers don’t work,” said Mr Herde.
The conference, sponsored by Singapore Re, Horangi and Singapore College of Insurance, ends today.