Singapore has launched the world’s first commercial cyber risk pool. Read here how it can help deal with cyber-threats.)
Singapore has launched the world’s first commercial cyber risk pool. It will provide cyber insurance to corporate buyers in Asia that is supposed to be supported by both insurance linked securities (ILS) and reinsurance.
The formation of the pool was announced by the finance minister, Heng Swee Keat at the 15th Singapore International Reinsurance Conference on 29th October.
The Finance minister also announced that the cyber risk pool will commit up to US $1 billion of risk capacity and will be backed by the capital from both traditional insurance or reinsurance and insurance-linked securities (ILS) markets to offer tailored cyber coverage solutions.
The cyber risk pool has been established with the assistance of the Singapore Reinsurer’s Association and cyber expert Peter Hacker.
“To date, twenty insurance firms have indicated their interest to participate in this pool, which would allow corporates in ASEAN and Asia to be protected against cyber-related losses,” said Mr. Heng Swee Keat.
With this pool, the nation can ensure peace of mind to the investors and global business against the losses caused by cyber incidents.
The minister assures, “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. I encourage you to consider participating in this joint effort, and to work together to develop better risk models to price cyber risks appropriately. With proper pricing, more corporates will be encouraged to take-up cyber risk protection.”
Given that Singapore is more prone to cyber-attacks over the years while 60 per cent of Asian companies lack threat monitoring system, the pool is a welcoming step and a need of hours as well.
“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. As a result, most policies have too much exclusion,” said Mr Heng.
Creating of the pool will not only prevent and deter attacks, but also minimize the consequences of attacks. The country is looking serious to deal with cyber-attacks as it had earlier launched cyber security centre known as the ASEAN-Singapore Cyber security Centre of Excellence.