Cyber threats are increasing in the Asia Pacific region, but most companies still do not use cyber insurance. A new Aon report shows that only 17 percent of digital assets are insured, even as businesses move deeper into digital operations.
Why Companies Are Not Buying Insurance.
Experts say many businesses lack financial modelling to understand their cyber risk. They also do not have enough suitable insurance options. This leaves a large gap between rising threats and low protection.
Adam Peckman from Aon says cyber risk has become a major concern for business leaders. But only 12 percent of companies use proper analysis when deciding about cyber insurance. He says this lack of financial understanding is one of the biggest problems. Peckman also points out that Asia Pacific has fewer strong regulations compared to North America and Europe. Because of this, many companies only buy cyber insurance after a major incident, not before.
Peckman believes things may improve as more countries in the region start making stronger rules for data safety and cyber security. Jennifer Brunnie from Gallagher Re says many cyber insurance products available today do not fit the real needs of the Asia Pacific market. She adds that many agents are not properly trained to explain or sell cyber insurance. Brunnie says the region needs insurance options designed specifically for local risks. Larger companies especially need stronger and more targeted coverage.
According to Brunnie, rules alone are not enough. They must be applied and enforced. She says stronger and wider regulations can push companies to improve cyber security.
Both experts agree that regulators must take a bigger role. Peckman suggests raising security standards and introducing mandatory reporting of cyber incidents so businesses can share information and improve together.
