To further the development of cyber insurance in Singapore, the MAS is supporting the Cyber Risk Test-bed project. This will promote both the demand for and supply of insurance coverage, as well as tackle the difficulties that arise when nurturing new and emerging lines: •  On the supply side, a lack of loss and claims data that underpins an effective and accurate risk pricing model. •  On the demand side, a lack of awareness as cyber risk is new and emerging, and exposures are therefore difficult to understand and quantify. •  Finally, insufficient technical expertise to underwrite such complex risks. Led by the NTU-Insurance Risk and Financial Research Centre (IRFRC) in collaboration with the Agency for Science, Technology and Research (A*STAR), the insurance industry and corporates, the industry-wide cyber insurance test-bed project seeks to address the limits of insurability of cyber risks in three ways. •  First, the common data sharing platform encourages pooling of not just insurers’ claims data, but also corporates’ potential loss data simulated through hypothetical events. •  Second, it helps corporates understand their potential exposures and losses. •  Third, the players on the platform can come together to establish industry standards on clear-cut definitions of cyber risks, coverage limits and terms and conditions. Today, I am very pleased to announce SCOR as the first founding member to join the Cyber Risk Test-bed Alliance. We remain in close discussions with a number of insurance players, and look forward to the industry’s active participation on this strategic project.
Cyber risks thus present an enormous potential for insurance players – not just to capitalise on this insufficiently tapped space, but more importantly, to play a vital risk management role for the wider society: •  Increasing awareness of cyber exposures, as well as the forces of regulatory change, will underpin the rapid growth of cyber insurance. It is estimated that the cyber insurance market will grow 30% per annum to $ billion in annual premiums by 2025. 2  BIS central bankers’ speeches  •  Companies are increasingly focusing on cyber security issues. 63% of boards today actively address computer and information security, up from 33% in 2012. The sharp increase is likely driven by the recent high-profile and well-publicized cyber incidents. •  Governments are also gearing up to address the problem. There is a trend towards stringent data protection regimes that are backed by increasing levels of liabilities such as more notifications and significant fines for data breaches. US, Hong Kong, Singapore and Australia are among those already enforcing, or looking at, new laws, while the European Union is looking to harmonise pan-European data protection laws across the EU member states. As technology and the users – or abusers – of technology get smarter, the extent of and impact from cyber breaches will correspondingly rise. Businesses must prepare for this new era of cyber risks with cyber insurance as a critical component in a comprehensive risk management strategy.