The cyber insurance market in Singapore is forecast to grow by 50 percent in 2016, according to AIG Asia Pacific Insurance.
AIG revealed in a new report that as Singapore comes into contact with new interconnected technologies and increasing automation, there is likely to be a rise in threats of cyber attacks and sabotage for all companies.
AIG Singapore’s head of financial lines, Lai Yen Yen, said: “While cyber attacks grow in size, volume and sophistication, defensive methods and technologies have not seen a corresponding evolution, potentially costing businesses millions in the event of a cyber breach.”
The report found that two-thirds of surveyed public companies in Asia acknowledge that cyber insurance is increasingly important in the future, although only 9 percent of those companies were covered by some form of cyber insurance.
Yen said: “Over the past three years, AIG Singapore has seen a seven-fold increase in inquiries about cyber insurance policies. We predict this strong demand from Singapore companies will continue over the next five years. Based on what we have observed, less than 10 percent of Singapore companies hold such insurance, but we forecast that the number of companies taking up cyber insurance will accelerate to 40 percent by 2020.”
According to the report, AIG Singapore expects strong demand for cyber insurance to continue from finance and technology companies, and new demand to emerge from healthcare companies.
AIG also predicts that cyber risks in 2016 will range from both internal and external factors, including lack of data encryption, increased use of malware and outsourcing to third-party providers.
“Not only do data leaks result in financial losses including compensation pay-outs and regulatory investigation, but reputational damage and loss of consumer confidence can also have a long-term impact on a company’s bottom line.”
