Several non-life insurers in Japan are strengthening their cyber insurance policies by providing wider coverage and higher payouts in the face of intensifying cyber risks.
Traditionally, hardware covered by cyber insurance policies involved only computers and servers. But now, insurers are beginning to cover other devices such as surveillance systems and factory control equipment, as these are increasingly connected through the Internet of Things (IoT).
Just this month, Tokio Marine & Nichido Fire Insurance added devices that are part of the IoT, such as industrial monitoring and control equipment, to their cyber policy coverage. In case a cyber attack causes information loss or stoppage of production at a factory, the insurer will reimburse the financial damage.
By February, Sompo Japan Nipponkoa Insurance will compensate companies for business interruption due to a cyber attack. Profits lost due to work stoppage will be reimbursed, along with any damage to equipment. Payout limits may be raised to ¥300 million (US$2.64 million) from ¥100 million for small and medium enterprises.
Want the latest insurance industry news first? Sign up for our completely free newsletter service now.
Sompo will also launch a free service that estimates the damages a company would incur in a hypothetical cyber attack. It was developed in cooperation with US-based firm Risk Management Solutions, the University of Cambridge in the UK, and others.
Meanwhile, Mitsui Sumitomo Insurance will make it easier to purchase cyber cover beginning in March. It will give its individual offices more freedom to underwrite such policies, which currently need approval from the firm’s higher-ups.
According to an experiment by the Japanese National Police Agency, its bait network received an average of over 2,000 hacking attempts each day. Currently, organizations that handle private data for 5,000 individuals and above are legally required to take steps to protect the data. The government plans to amend the law and lower the limit, making it applicable to smaller entities.
Japanese insurer to cut workforce due to job automation
Top operational risks faced by companies revealed
Are brokers equipped to deal with cyber insurance?