Demand for cyber insurance in Singapore is expected to grow by 50 percent this year as more businesses look to mitigate the high reputational and financial risks associated with cyber breaches, according to AIG Asia Pacific Insurance.
New interconnected technologies and increasing automation will result in a rise in threats of cyber attacks and sabotage for all companies, said AIG. It added that the strong demand for cyber insurance will be driven by finance, technology and healthcare companies.
"Over the past three years, AIG Singapore has seen a seven-fold increase in inquiries about cyber insurance policies," said AIG Singapore's Head of Financial Lines, Lai Yen Yen. "We predict this strong demand from Singapore companies will continue over the next five years. Based on what we have observed, less than 10 per cent of Singapore companies hold such insurance, but we forecast that the number of companies taking up cyber insurance will accelerate to 40 per cent by 2020."
AIG also forecasts cyber risks in 2016 to 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 payouts and regulatory investigation, but reputational damage and loss of consumer confidence can also have a long-term impact on a company's bottom line. 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," said Lai.
To help businesses protect their business and improve their risk mitigation frameworks, AIG Singapore offers its CyberEdge policy, which provides crisis consultants and legal advisors to help businesses mitigate the exposures in the event of a cyber breach, added Lai.
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