Asia-Pacific (APAC) is without doubt one of the fastest-growing areas for cyber insurance coverage, in accordance to a S&P World survey. Over the previous 5 years, the area’s cyber insurance coverage market has grown 51.2% yearly, making APAC one of the dynamic market on this planet for the protection sort. German insurance coverage group Munich Re expects the market to proceed its development momentum, projected to triple in dimension by 2025.
Regardless of its fast development, the APAC area stays the second smallest cyber insurance coverage market globally, S&P World says, a press release that aligns with findings of a Moody’s survey which revealed robust cybersecurity oversight amongst APAC gamers in comparison with world counterparts.
Within the area, barely over 50% of issuers at the moment have standalone cyber insurance coverage, and although the determine represents a substantial enchancment from 38% in 2021, it’s nonetheless approach behind areas just like the Americas the place 85% of issuers are cyber insurance coverage protection.
Cyber insurance coverage, additionally referred to as cyber legal responsibility insurance coverage or cybersecurity insurance coverage, covers monetary losses that firms have because of ransomware assaults, knowledge breaches and different cyber incidents.
The class is experiencing fast development inside the world insurance coverage market, with volumes tripling within the final 5 years to gross direct written premiums of US$13 billion in 2022, in accordance to the Swiss Re Institute (SRI). Development is projected to hold on this 12 months onwards to achieve a complete premium of about US$23 billion by 2025.
World cyber insurance coverage premiums (US$ billion), Supply: Swiss Re, Aug 2023
Cyber dangers fueling the expansion of cyber insurance coverage in Asia Pacific
The expansion of cyber insurance coverage is being pushed by booming cybercrime exercise. In 2022, malware incidents rose for the primary time since 2018, reaching 5.5 billion assaults and rising 2% year-on-year (YoY), in accordance to the 2023 SonicWall Cyber Risk Report. Malware is malicious software program which infects a pc and which is particularly designed to disrupt, harm, or acquire unauthorized entry to a pc system.
Ransomware assaults, in the meantime, was up 50% YoY throughout the first half of 2023, pushed by the provision and accessibility of so-called ransomware-as-a-service, in accordance to the World Financial Discussion board. Ransomware is a kind of malicious software program assault designed to dam entry to a pc system till a ransom is paid.
Lastly, distributed denial-of-service (DDoS) assaults reached unprecedented quantity in 2022, led by a considerable enhance in nation state assaults and continued proliferation of low-cost DDoS-for-hire providers. Microsoft says it mitigated a mean of 1,955 assaults per day that 12 months, a 40% enhance from the prior 12 months.
Cybersecurity developments in 2024
Munich Re highlights a number of key dangers and developments anticipated to form the cyber risk panorama in 2024 and past.
First, it notes that the adoption of huge language fashions (LLMs) and generative synthetic intelligence (gen AI), like ChatGPT, is marking a brand new period for cyber dangers. AI is predicted to automate and personalize cyberattacks, making them extra environment friendly and widespread. Furthermore, AI-driven phishing and malicious LLMs like WormGPT is projected to empower much less expert attackers, the agency says.
On the optimistic facet, AI may assist enhance cybersecurity by enhancing detection, response capabilities, and assault attribution. Within the insurance coverage trade, AI can be poised to boost threat evaluation, supply custom-made protection, enhance incident monitoring, and streamline operations, it says.
One other cyber pattern highlighted by Munich Re is the continuing rise of nation-state-sponsored cyber actions. These actors could exploit AI for disinformation and knowledge warfare, significantly throughout elections. These nation-state-sponsored actions may additionally embrace espionage and damaging cyber operations.
Lastly, disinformation (false content material) and malinformation (damaging info) will grow to be expensive threats, Munich Re says, with company spending on countering malinformation projected to exceed US$30 billion by 2028.
Cybercrime is estimated to have value organizations US$8 trillion in 2023, up from US$3 trillion in 2015. Cybersecurity Ventures, a researcher and writer protecting the worldwide cyber economic system, predicts that this value will develop by 15% per 12 months within the close to time period, reaching US$10.5 trillion yearly by 2025.
Featured picture credit score: edited from freepik
