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SECURITY > Cybersecurity

Demand for cyber insurance on rise in Japan

  • July 31, 2021
  • , Jiji Press , 5:54 p.m.
  • English Press

 

Tokyo, July 31 (Jiji Press)–Demand for insurance products covering damage from cyberattacks is on the rise in Japan as security risks are heightening in line with an increase in the number of people working from home amid the novel coronavirus crisis.

 

The number of cyber insurance contracts concluded last year grew about 50 pct at MS&AD Insurance Group Holdings Inc. <8725> and around 20 pct each at Tokio Marine & Nichido Fire Insurance Co. and Sompo Japan Insurance Inc.

 

Cyber insurance products pay compensation for damage such as information leaks blamed on illegal access to networks and hacking, as well as cover costs for related investigations and measures for preventing similar attacks.

 

Measures against cyberattacks are not necessarily sufficient in the work-from-home environment.

 

Many companies are taking measures against cyberattacks, according to the General Insurance Association of Japan. But some firms have said that it is difficult to completely block such attacks.

 

Cyber insurance will likely become necessary social infrastructure in the near future, a Tokio Marine official said.

 

Still, challenges remain, with only about 8 pct of companies in Japan having cyber insurance contracts at present, according to a survey by the association.

 

About 20 pct of companies that do not have such contracts said they believe that the risk of cyberattacks is low. “A sense of crisis is still very low, mainly among small firms,” an official of the association said.

 

“We need to spread cyber insurance products speedily in line with the pace of digitalization of society,” said Shinichiro Funabiki, head of the association and president of Sumitomo Mitsui Insurance Co., a unit of MS&AD.

 

 

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