Asia set to become the next big cyber insurance market

Asia is set to become a major market for cyber insurance, as China steps up its cyber activities ahead of a potential future show-down over Taiwan, says cyber insurance risk specialist Cyber Cube. According to Cyber Cube’s Cyber Threat Intelligence principal William Altman, growing demand for cyber insurance in Asia is attracting insurers to the region. “It’s a young market, but there are some very smart people working on this. Some of the biggest names in insurance have already set up shop [in APAC] and are moving forward. Although the market may be somewhat underdeveloped today, I fully expect a rapid transformation of that market. It may be one of the largest markets for cyber insurance in the future,” he predicted. Asia Pacific (APAC) is one of the fastest-growing regions for the past five years in terms of primary cyber insurance market, according to S&P Global. The compound annual cyber insurance growth rate of APAC between 2018-2022 was 51%, compared with 36% globally, the ratings agency said. However, just 6% of the US$12bn global cyber insurance market premium is from Asia Pacific, compared with 56% in North America and 37% in Europe. Speaking on a recent webinar, Altman noted that Singapore is emerging as a hub for cyber insurance in Asia. “This is a market that Cyber Cube is seeing a lot of interest in, particularly Singapore, which is leading the way here. There are top-down government mandates to bolster cybersecurity, including preventative measures and risk management, which includes insurance,” he said. In 2019, the Monetary Authority of Singapore (MAS) issued a set of legally binding requirements to raise the cybersecurity standards and strengthen cyber resilience of the financial sector. These measures are starting to take hold and incentivise companies to purchase insurance, said Altman. In addition, companies in Asia are seeing an increase in cyberattacks, and greater frequency and severity of cyber losses. “There is a desire on the part of companies in Asia Pacific to purchase cyber insurance,” said Altman. In its first half Global Threat Outlook, Cyber Cube warned of the growing cyber threat posed by nation states, including China. The cybersecurity firm warned that China is expanding and intensifying its cyber activities as it prepares for a future conflict over Taiwan. Historically, China’s primary focus has been on the US and Asia (notably Taiwan, India and Pakistan), but also Europe, Altman said. Data sourced from the European Repository of Cyber Incidents underscores China’s role as a source of cyberattacks against Europe, Cyber Cube said in its Global Threat Outlook. “[China] is pretty much waging cyber war everywhere. The big difference today to what we have seen in the past is that these threat actors used to position themselves in networks for the purposes of espionage and data theft… looking to spy on governments and steal intellectual property from corporations,” said Altman. “That is still taking place today, but we have noticed a shift in their activities. They are now positioned in critical infrastructure networks to destroy or disrupt those networks. This is thought to be in the event that they invade Taiwan and the US comes to Taiwan’s assistance,” he added. China’s cyber operations against the US have taken a strategic turn, emphasising disruption in industries that could assist Taiwan in the event of a Chinese invasion, according to Cyber Cube. “While disruptive attacks from China on the US and Europe have not materialised so far, there is an active development of capabilities with the potential for future disruptions. This evolving landscape poses a substantial risk, not only to the US but also to targeted nations in Europe and Asia,” it said in its Global Threat Outlook. Cyber Cube is also seeing an uptick in ransomware activity in Taiwan, which Altman believes is the result of China copying Russian tactics. “Primarily, I think this is the Chinese government adopting the Russian playbook. I’m speculating, but given research data I have seen, this would be proved to be true in my mind. China is using [cyber] criminals to destabilise the Taiwanese economy in the lead-up to an invasion or strategic gamesmanship in which they will try to get the Taiwanese to acquiesce,” he said. “They will have to destabilise the [Taiwanese] economy and hack significant commercial entities to do that. And we are starting to see those wheels turn today,” Altman said. Cyber Cube also warns of a growing threat against critical infrastructure posed by nation state cyber threat actors. “We are looking at the reality that nation state threat actors are burrowing deeper into critical infrastructure networks. The Chinese are positioning for disruption and destruction in these networks, but they are not the only ones. We see Russians and Iranians get involved as well,” said Altman. “China is almost certainly capable of launching disruptive critical infrastructure attacks in the US. There is a mutually assured destruction element today. We are likely deep in their networks, and they are deep in ours. This creates vast insecurity in cyber space related to our two nations,” he added. While energy and transport networks are top targets for Chinese hackers, telecoms and internet providers are increasingly seen as an attractive target for nation states, warned Cyber Cube. For example, Altman noted the successful hacking of Ukrainian telecoms provider Kyivstar at the start of this year, which resulted in the loss of mobile phone, internet and banking access for millions of Ukrainians. “This [telecoms systems] is a major single point of failure technology that the Russians managed to compromise… We know that Russia will practice its elite cyber tactics in Ukraine prior to using them in other countries, including the United States and Europe,” said Altman. “We fully expect, due to the successful nature of this operations, this type of attack will occur more and more. And we are looking today at modelling major network operator outages in the US to help our clients prepare for the day when the Russians attack a major mobile network operator in the US,” he said.

Asia set to become the next big cyber insurance market

Want to read this article?

Read Next

UK law firm appeals £60k penalty for failing to report data breach

Ardonagh appoints CEO for Dutch business as Leons steps down

Renewable energy providers must demonstrate resilience, says FM

Guidance on supervision of climate-related risks from IAIS

Markel to buy marine MGA The MECO Group

UK law firm appeals £60k penalty for failing to report data breach

Ardonagh appoints CEO for Dutch business as Leons steps down

Renewable energy providers must demonstrate resilience, says FM

Guidance on supervision of climate-related risks from IAIS

Markel to buy marine MGA The MECO Group

Keep yourself informed

Sign up for Commercial Risk’s newsletters

Want to read this article?

Read Next

UK law firm appeals £60k penalty for failing to report data breach

Ardonagh appoints CEO for Dutch business as Leons steps down

Renewable energy providers must demonstrate resilience, says FM

Guidance on supervision of climate-related risks from IAIS

Markel to buy marine MGA The MECO Group

Related Articles

Keep yourself informed

Sign up for Commercial Risk’s newsletters