INSURANCE IN ASIA: 2019 - GROWING CYBER RISK SEGMENTS

15 February 2019

GROWING CYBER RISK SEGMENTS

According to the European Confederation of Institutes of Internal Auditing's (ECIIA) annual risk report, cybersecurity would be one of the biggest risks faced by organisations in 2019. While organisations plan to transcend away from legacy systems and invest in state-of-the-art technology and security, hackers are discovering new ways to exploit systems, such as:

DDoS Attacks

Vulnerable IoT devices could lead to massive distributed denial of service (DDoS) attacks. According to research firms, within the APAC region, there was a 100% increase in DDoS attacks between 2017 and 2018. In another study, ~75% of APAC region’s IT security teams believed that their IoT devices are not secure. For 2019, such attacks are expected to expand in scope and sophistication and organisations will start to focus more on taking proper steps to ensure a secure IT infrastructure.

Cyber-Physical Systems

In terms of emerging threats in cybersecurity, attacks on cyber-physical systems (CPS) could be a serious concern for the APAC region. These attacks target vulnerable process control systems, smart power grids, autonomous vehicle systems or any other sophisticated computing systems used to sustain critical infrastructure. According to a Frost and Sullivan study on cybersecurity maturity, ~50% of APAC organisations are reactive towards threats or have poor readiness to cope with advanced attacks such as CPS. Only 4.3% of firms polled showed the capability to effectively mitigate threats.

Risk related to 5G Technology

5G is expected to become publicly available over the next two years in Asia and the US. The technology offers improvements in data transmission speeds and capacity compared to current networks. Higher transmission speeds would enable the smooth functioning of IoT devices such as allowing doctors to carry out telemedicine and enabling fully autonomous self-driving cars. But on the other side of the coin, experts believe that IoT is currently at a nascent stage and dependence of critical data on such devices would lead to higher risks. IoT devices are yet to be adopted fully and are yet to be tagged as ‘fully-secured’ enough. There would be a risk of exposing confidential or personal information.

Conclusion

In terms of technology development and evolving regulation, the outlook remains positive for the Asian insurance market in 2019 and onwards. Its trends bring confidence; the adopting of the concept of FinTech regulatory sandbox, creating an environment for insurtechs and allowing foreign insurers/insurance brokers to operate in local markets, all send a positive message about the development of the Asian insurance industry. Asia is still an attractive proposition for global insurers or brokers to invest in and reap the long-term benefits.

This 3-part article aims to shed light on the possible directions that the Asian insurance market can take in 2019 through analysing three trends—InsurTech development, regulatory changes, and evolving cyber threats. Click here to read part 1 on InsurTech development and here for part 2 on Regulatory Environment. 

For further information, please contact Graham Edwards, Regional Director of Sales and Marketing at Graham_Edwards@jltasia.com.