Growing interest in cyber insurance amid costly attacks

Companies seeking to manage their financial risks as threat landscape evolves

- Alyssa Woor

There has been growing interest in cyber insurance from Singapore businesses over the past few years as cyber attacks on corporations hit the headlines, according to providers Chubb and MSIG Insurance Singapore.

Mr Jeremy Lian, senior vice-president of technical services at MSIG, said: "The uptake has been encouraging and we are seeing more small and medium-sized enterprises open to having cyber insurance as an add-on to their core business coverage."

Factors contributing to this increase include an evolving threat landscape, changes in compliance, and regulatory requirements across various sectors that may be influencing organisational risk management strategies, added Mr Anshuman Sharma, the director of the Verizon Threat Research Advisory Centre and cyber-security consulting services.

Cyber insurance has been growing in importance as companies seek to manage their financial risks from cyber attacks.

Data breaches are costly for companies, and the full impact on the company is not clear to investors even months after an incident has occurred, said Mr Conrad Tan, an environmental, social and governance analyst at Bloomberg Intelligence.

There are multiple channels of potential financial impact, including loss of revenue from business disruption and damage control and data recovery costs, he noted.

Mr Tan added: "Other costs may be incurred long after an incident, such as regulatory fines, additional investments to strengthen cyber defences, or higher cyber insurance premiums."

Cyber insurance debuted in Asia around 2009 and coverage typically focused on a company's thirdparty liability concerns, such as fines and penalties or claims brought forward by entities or an individual. In recent years, firstparty losses which refer to incidents such as lost profits from business interruption, data and systems recovery and extortion expenses - have become more prominent.