Asia-Pacific businesses may not be effectively protected from cyber risk

A recent survey from Aon indicated that businesses facing cyber risk in the Asia-Pacific region may not be fully protected, given that just 13 percent of potential losses from “intangible assets” have been considered compared to 49 percent for tangible assets.

“This is despite more than a quarter of respondents having experienced a cyber breach in the past 24 months. This bias means information and system assets are too often exposed without appropriate protection, which has significant implications for increasingly connected global businesses,” said Aon in the survey, conducted in conjunction with the Ponemon Institute. “Despite this growing awareness of cyber risk, there is a huge insurance gap. When comparing intangible assets to tangible assets, APAC business leaders indicated that intangible assets are 36 percent more exposed than tangible assets on a relative value to insurance protection basis.”

In addition, Aon found that Asia-Pacific (APAC) businesses are far more likely to self-insure intangible assets than buy cyber insurance. The vast majority (87 percent) do not purchase cyber insurance at all, although Aon found some positive trends on that point, with more than half planning to buy it in the future.

“Some organizations think cyber insurance will have too many exclusions, or question the relevance of insurance risk transfer to actual threats,” said Jasminder Kaur, senior vice president of financial services and professions group at Aon Malaysia. “The gap between actual insurance cover and respondent perceptions is alarming and clearly demonstrates the need for greater awareness of the benefits that cyber insurance can deliver. Many aspects that APAC organizations don’t expect to be covered (e.g. human error, third party incidents, system failures and notification costs to victims) are often included in cyber insurance policies, or can certainly be negotiated with insurers.”