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Cyber insurance the next growth frontier for local insurers, says MAS
Domestic penetration could rise to 40% by 2020.
Local insurers should look to cyber risk management for growth, as enterprises grapple with increasingly sophisticated attacks.
Bernard Wee, Executive Director at Monetary Authority of Singapore, said that despite growing risks, cyber insurance adoption by SMEs remains low at less than 10%.
Penetration also varies by sector. Manufacturing companies have a take-up of less than 5%, compared to financial services, technology and telecommunications companies (35-42%).
"Cyber insurance adoption in Asia has clearly not kept pace with the proliferation of technology in the region. But therein lies significant opportunity for cyber insurers here. The cyber security market in the Asia Pacific region is projected to grow at over 15% per annum from now until 2019. In Singapore, AIG estimates that cyber insurance penetration could rise from 9% today to 40% by 2020," he said.
However, insurability remains a problem even as cyber insurance demand grows. Policies are not standardised, and underwriting is hindered by the scarcity of publicly available data on the scale and financial impact of attacks.
"To facilitate the systematic collection and modelling of cyber risks data, MAS is pleased to be part of the launch of the Cyber Risk Management Project today. The first of its kind in Asia, the Cyber Risk Management Project is a unique endeavour, bringing together industry, academia and government in a partnership to tackle demand and supply challenges confronting the cyber insurance marketplace," he said.
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