US cyber insurance sales at US$2 billion last year, a cumulative annual growth of 26 per cent since 2015
Zurich Insurance, Peak Re see strong growth in Hong Kong
Cyber insurance, which covers losses emanating from loss of data as well as liabilities arising from cyberattacks, has recorded strong growth globally over the past four years, Moody’s Investors Service said in a report last week.
The rating agency said it was a highly profitable business line for global insurance companies. “The proliferation of new rules around the globe boosts demand for cyber insurance, but also raises questions and highlights uncertainty around the scope of insurance coverage,” said Sarah Hibler, Moody’s associate managing director.
According to the report, based on US financial regulatory data, direct cyber insurance premiums grew to US$2 billion last year, or a cumulative annual growth rate of 26 per cent since 2015.
In Hong Kong, while the Insurance Authority does not have data for cyber insurance, Zurich Insurance and Peak Re have both seen strong growth.
“It is true that we see a lot of interest from insurance companies across Asia in growing their cyber business,” said Franz Josef Hahn, chief executive of Peak Re, Hong Kong’s home-grown global reinsurance company.
Zurich Insurance offers several products, including cybersecurity and privacy liability policies for commercial clients. It also offers two cyber insurance products targeted at small and medium enterprises.
“We do see growth potential in this area in coming years,” said Eric Hui, chief executive of Zurich Insurance (Hong Kong).
A key challenge insurers face is potentially huge claims. In the United States, the average cost of a cybercrime was about US$27 million last year, up from US$21 million in 2017, according to a report sponsored by Accenture Security. The claims are high because a single cyberattack might affect many clients, a situation that will get worse when companies move to cloud computing, the Moody's report said.
In Hong Kong, insurers might also find it difficult to sell policies to small and medium enterprises.
“Hackers might target large companies and not SMEs. I do not have any cyber insurance cover currently, nor do any of my friends,” said Arthur Chan, director of SagaDigits, a Hong Kong start-up that uses big data to help consumer companies enhance their services.
“I will consider buying cyber insurance products if the price is reasonable. However, I have not received any cold calls from any insurance company introducing [cyber insurance] products to me. If they do, I may consider them if they are not too expensive,” he said.
SCMP Published: 12:00pm, 28 Jul, 2019