Demand for cyber insurance from firms in Greater China and elsewhere in Asia is poised to soar, based on enquiries received after the “WannaCry ransomware” attack earlier this year, executives at American International Group Inc said.
The American insurer saw an 87 percent jump in enquiries for cyber insurance policies in May compared to April for Greater China including Hong Kong as a direct result of the WannaCry attack, while the global increase was 38 percent, they said.
“The big increase means the organizations are aware they really need protection,” Cynthia Sze, head of an AIG business in Greater China that provides solutions to companies dealing with cyber breaches, told reporters. AIG executives declined to give details on numbers or say how many of the enquiries actually resulted in policy sales.
The self-replicating WannaCry malware in May infected over 200,000 computers in 150 countries.
A typical cyber insurance policy can protect companies against extortion like ransomware attacks. It could also cover the investigation costs and pay the ransom.
In Hong Kong, which is dominated by small and medium sized enterprises, the impact of a cyber attack could be severe as cyber threats are not a priority given the limited resources of SMEs, said Sze.
Citing Hong Kong police statistics, Sze said computer security incident reports have grown to about 6,000 last year from 1,500 in 2009. Financial losses resulting from such incidents jumped from HK$45 million ($5.76 million) to HK$2.3 billion over the same period, she said.
Hong Kong police did not immediately respond to a request for comment to confirm the numbers.
“WannaCry has really changed the dynamics. We used to tap large multinational companies that understood where the exposure was. Now we are really talking about mid-market and SMEs,” said Jason Kelly, AIG’s head of liabilities and financial lines for Greater China, Australasia and South Korea.
The global market for cyber insurance is worth $2 billion, with 30 percent of middle to large firms purchasing cyber insurance protection, according to AIG. The insurer has also seen an average annual growth rate of 20 to 25 percent in cyber insurance policies over the past three years worldwide, said Kelly.
Insurance companies have been cautiously entering the cyber insurance market as they look for growth amid stiff competition and potential exposure to cyber breaches.
According to Kelly, the annual damage from hackers to the global economy reached about $400 billion in 2015. ($1 = 7.8134 Hong Kong dollars)