12 October 2016 Insurance

Cyber growth to continue in Asia-Pacific

The trend for companies in Asia-Pacific to seek cyber insurance and for more carriers to enter the cyber market will continue, with ever broader coverage, said Andrew Bart, chief executive officer, Asia-Pacific, Crawford & Company.

Governments in Asia-Pacific are becoming more aware of the risks around cyber following numerous data breaches and are seeking to legislate, typically mandating regulatory notification and substantial penalties.

The Aon Cyber Insights Report 2016–Australia recently suggested that less than one third of companies have an incident response plan which specifically addresses cyber incidents, that one quarter of organisations report their IT systems have been compromised in the last 12 months and that more than 60 percent of organisations in Australia allow BYOD (bring your own device) for work purposes.

“Collectively, as technologies change the way we operate commercially and choose to live our lives, these changes create new risks as companies struggle to understand and come to terms with their responsibilities,” Bart said.

Having a cyber incident plan that is able to respond if the worst happens is good business practice and Bart expects more company boards to recognise that risk by demanding best-in-class incident response plans. Against this backdrop, cyber insurance will continue to gain ground in the region.

Addressing another hot topic for Asia-Pacific, he noted that it is impossible to predict what the rest of the year may hold in store from a catastrophe prospective, warning that the recent below average claims experience should not lull risk managers into a false sense of security.

“Major catastrophes of the past decade including the Thai floods, Christchurch earthquakes, Superstorm Sandy, Tianjin explosion and Fort McMurray wildfires have demonstrated that the unexpected does happen,” he said.

Satellite imagery and drone usage will continue to grow for disaster events, predicts Bart.

“Tianjin was an almost perfect situation for satellite imagery. There were rows and rows of cars and the satellite photography was so good that you were almost able to count the number of vehicles, so you could come up with a total loss number from that exercise.”

Technology can be used in this way to make initial damage assessments, but Bart added that it does not replace on-the-ground expertise.

“While satellite images and drones are here to stay and they are very helpful, you cannot replace having somebody actually on site.”

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