Singapore will form a world-first commercial cyber risk pool, as it works towards strengthening the region’s resilience against growing cyber threats, according to Finance Minister Heng Swee Keat.
“The pool will commit up to US$1 billion in capacity, and bring together both traditional insurance and the insurance-linked securities markets to provide bespoke cyber coverage,” Heng said at the 15th Singapore International Reinsurance Conference.
He noted that Asia is one of the hotspots of malicious cyber activities, with hackers being 80% more likely to target Asian organisations, the Singapore Business Review reported. This is because Asia’s cyber defences and responses are weak, with corporations 1.7 times slower to detect cyber breaches and over 60% of companies having no monitoring system against cyber threats.
“On the insurance front, insurance coverage of cyber risks remains very low globally, due to a lack of historical data and intelligence to support risk assessment, underwriting and pricing,” Heng said. “As a result, most policies have too many exclusions.”
According to Heng, 20 insurance firms have expressed interest in joining the risk pool, which will boost protection for Asian organisations against cyber threats.
“The cyber risk pool reflects Singapore’s standing as a specialty insurance hub, and our commitment to driving forward-looking insurance solutions to tackle new and emerging risks,” he said.
Additionally, Heng announced the creation of the Global-Asia Insurance Partnership, which seeks to bring together the insurance industry, regulators, and academics and jointly create innovative solutions for the insurance and risk management sectors.