Singapore cyber insurance market to skyrocket by 50% in 2016

Strongest demand will likely stem from finance, technology sectors.

As Singapore pushes to become the world’s first Smart Nation, more and more businesses are turning to cyber insurance to mitigate the fallout of possible cyber attacks.

According to a report by AIG Singapore, the cyber insurance market in Singapore is expected to skyrocket by 50% this year.

The insurance company further reveals that two in three public companies in Asia surveyed acknowledged cyber insurance to be increasingly important in the future. However, only 9% of these companies were covered by cyber insurance.

Further, AIG Singapore states that over the past three years, inquiries about cyber insurance policies have increased sevenfold. This strong demand from local firms is expected to persist over the next five years.

And though observations indicate that less than 10% of local companies hold such insurance, AIG Singapore forecasts that the number of firms taking up cyber insurance will jump to 40% by 2020.

Meanwhile, strong demand for cyber insurance will likely continue from finance and technology companies in particular, while new demand is expected to emerge from healthcare companies.

AIG Singapore also sees cyber risks this year to range from both internal and external factors, including lack of data encryption, heightened use of malware, and outsourcing to third party providers.

“The profound impact of a cyber attack means risks of this nature are starting to rank in the top three exposures of any business, regardless of the industry or size,” states Lai Yen Yen, AIG Singapore’s Head of Financial Lines.

“Our research in 2014 showed that 42 per cent of companies were concerned about loss of reputation, and 33 per cent were concerned about protecting against financial loss,” she adds.