Growing cyber insurance: implications for CISOs in Asia

According to a recent GlobalData poll, the swift growth of cyber insurance products has led to significant concerns among insurers regarding risk assessment and management, which directly impacts CISOs in their strategic planning for 2025.

Key concerns for insurers

1. Risk Assessment Challenges: The primary concern highlighted by industry insiders is the difficulty in accurately assessing cyber risk. The rapid digitalisation of businesses has outpaced the development of historical data necessary for effective risk evaluation. This lack of data makes it challenging for insurers to understand the potential exposure they face, particularly in a landscape where a single cyber incident could affect multiple clients simultaneously [1].
2. Claims Management: Alongside risk assessment, managing claims effectively remains a significant hurdle. The complexity of cyber incidents often leads to disputes over coverage and the extent of damages, complicating the claims process for both insurers and insured parties [1].
3. Reinsurance Limitations: The absence of robust reinsurance options further exacerbates the situation. Insurers are cautious about overexposing themselves in a market characterised by high volatility and increasing threat levels from cyberattacks [1].

Implications for CISOs

For CISOs in Asia, these challenges present both risks and opportunities:

• Increased Premiums: As insurers grapple with these issues, premium prices have surged, with increases of around 20% year-on-year reported recently. This trend is likely to continue, making it essential for CISOs to justify the need for cyber insurance to their executive teams [1].
• Demand for Tailored Solutions: The evolving nature of cyber threats necessitates that CISOs advocate for tailored insurance policies that align with their specific organisational needs. As Ben Carey-Evans, senior insurance analyst at GlobalData, notes, insurers must convince businesses of the value of cyber insurance and potentially customise policies to better fit their requirements.
• Strategic Partnerships: Collaborating with insurers to enhance risk management strategies can be beneficial. By sharing insights and data, CISOs can help insurers better understand their risk profiles, potentially leading to more favourable insurance terms and conditions in the future [1].

With the cyber insurance market in Asia set to grow significantly by 2025, CISOs must navigate the complexities of this evolving landscape. By understanding the challenges faced by insurers and advocating for tailored solutions, they can better protect their organisations against the increasing threat of cyberattacks, and just as important - the cost associated with such protection, including rising cyber insurance premiums.