AIG Philippines, an American nonlife-insurance company, said more businesses, especially the data-driven ones, should consider cyber-insurance cover to strengthen the protection of sensitive customer data.
The insurer said just a handful of businesses across the various industry sectors took the trouble of obtaining risk cover against cybersecurity breakdowns and breaches that could harm not just individuals and enterprises but entire industries or even the broad economy, as well.
According to AIG Philippines President and CEO Mark Lwin, data-driven industries, such as the business-process outsourcing (BPO) sector, as well as financial institutions, should consider cyber-insurance cover to limit the disruptive impact of hacking, among other ills.
“Industries and companies that are highly reliant on server network connections and handle sensitive customer data on a daily basis should consider taking out a cyber-insurance policy, “Lwin said.
Insurance Commissioner Dennis B. Funa recently appealed for nonlife-insurance companies to develop products helping mitigate financial losses should a cyber breach occur.
Under the Philippine Data Privacy law, companies are held accountable in handling sensitive customer data that further underscores the relevance of cyber-insurance cover for Filipino businesses.
“Cyber insurance is a risk transfer option which needs to be part of the overall risk-management strategy for any company using digital platforms or handling large amounts of personal data,” he added.
Some 50 BPOs took the trouble to obtain risk cover against cyber attacks and that more or less a dozen financial-services companies have done the same.
A 2015 study by global professional services firm Marsh & McLennan Companies-Asia Pacific Risk Center (MMC-APRC) showed that Asian firms are in great danger of facing cyber attacks, with foregone revenues in the Asia-Pacific region reaching as much as $81 billion in 2015.
Hackers, according to MMC-APRC, are 80 percent more likely to target Asian organizations, with lost revenues due to cyber attacks accounting for 25 percent of the global total of $315 billion.
Marsh Risk Consulting Managing director Douglas Ure said the severity of cyber attacks in Asia is great but companies in the region still lag far behind their Western counterparts in terms of cybersecurity.
Of 60 nonlife insurers in the country, AIG Philippines claims the distinction of being the first to have an approved cyber-insurance product in the market.
According to Leilani Isidro, AIG Philippines head of liability and financial lines, data leaks and losses can lead to regulatory fines and cyber attacks could result in the disruption or even complete shutdown of business operations.