Edward Shen
Head of Casualty Product Underwriting at Peak ReAPAC experienced rapid digitalisation during and post-pandemic and has the highest 2023-2030 forecast CAGR for digital transformation market size, according to Research and Markets.
This digital transformation is helping to drive the region’s leading global economic development – but comes with a heightened cybersecurity risk. According to FS-ISAC, cyber attacks in APAC increased 15% year-on-year in 2023.
Cyber insurance provides businesses with important risk mitigation services and financial protection against cybersecurity threats – helping businesses and communities across the APAC region to prosper.
In Peak Re’s home market of Hong Kong, cyber insurance brokers and underwriters are increasingly vigilant due to recent significant cyber incidents.
Notable examples include the 2024 Hong Kong deepfake video scam, which manipulated video content to deceive and defraud individuals, and the 2023 cyberattacks targeting Hong Kong Cyberport and Consumer Council systems, disrupting operations and compromising sensitive data.
These high-profile incidents have heightened risk awareness and spurred greater interest in cyber insurance.
According to S&P Global, global cyber insurance premiums were about US$12bn in 2022 and are expected to grow 25%-30% annually, reaching US$23bn by 2025. The APAC cyber insurance market, currently 6% of the global market, shares this growth potential. From 2018 to 2022, APAC’s CAGR for primary cyber insurance was 51.2%, and 43.4% for reinsurance. Globally, the CAGR for primary insurance and reinsurance averaged 36.2% and 58.0%, respectively.
Additionally, Lloyd’s reported that its APAC cyber portfolio grew twice as fast as its global portfolio from 2016 to 2023. In APAC, Australia and Japan lead with annual cyber premiums of around USD 500 million, while India and China are quickly catching up.
Edward Shen
Head of Casualty Product Underwriting at Peak ReDevelopments in the buyer, coverage, and capacity landscape
Cyber insurance buyers and enquiries continue to be dominated by large corporate clients. In contrast, SMEs represent a largely untapped and important growth segment.
As reported by the APAC Cybersecurity Fund, 80% of SMEs in Indonesia, Malaysia, the Philippines, Singapore, Vietnam and Thailand consider online platforms vital for their success. Reaching and protecting these customers will be increasingly vital for the region’s development. Gaps in digital progress across APAC also equate to an outlook for further opportunities to innovate customised cyber insurance solutions as digital infrastructure expands further across the region.
The coverage landscape is evolving, with distinct regional trends. In Asia (excluding Australia), the demand is primarily centered on first-party losses, especially business interruption. The recent CrowdStrike event may enhance such demand. In contrast, breach coverages are more robust in markets with stringent data protection regulations, such as Australia. Future shifts in coverage will be influenced by the evolving nature of cyber threats and regulatory changes.
The capacity provider landscape is also experiencing change. Excluding Japan, major multinationals dominate. Concurrently, local insurers are increasingly stepping up their presence. They are advancing their ecosystem capabilities in cyber risk monitoring and claims services, showcasing a growing expertise and responsiveness in the industry.
Edward Shen
Head of Casualty Product Underwriting at Peak ReA key challenge for APAC’s cyber insurance market as it steps up to delivering growth and serving its customer base is talent shortage. Providers must invest in and keep pace with this fast-evolving, technical risk, and must continually innovate cyber products and services to meet consumers’ needs and expectations.
Cyber underwriters and brokers often move into cyber from the financial line or casualty areas, necessitating comprehensive upskilling. Attracting IT and cybersecurity talent; regular training; and establishing interdisciplinary operational teams for risk monitoring and mitigation, underwriting, and claims will be decisive for success.