When it comes to discussing the cyber insurance landscape, the current hot topic usually concerns the hardening of the commercial cyber market due to ransomware attacks – mostly aimed at the risks to companies. However, what is often overlooked in the discussion is the real threats for individuals – especially in Asia. As remote working becomes the norm, online usage increases and the Internet of Things (IoT) technology grows among personal households, a unique risk to the Asian market can be seen as hackers are targeting individuals at an alarming rate. Personal Lines Cyber aims to offset these risks.

Asia can be seen as a unique high-risk area when it comes to cyber criminality for several reasons. The main of which is the sheer speed at which APAC countries are fully embracing the digitalization movement. Governments are also adopting and encouraging advancements in digitizing catalyzed by the new normal of the Covid-19 pandemic. For example, South Korea has created the Digital New Deal¹, pushing for further expansion of 5G networks, AI, cybersecurity, data infrastructure, and smart ecosystems. 

As many countries and organizations may be pushing for digital growth, consumer adoption in Asia to this new landscape shows surpassing growth. Currently, 70% of APAC residents own smartphones³. They also make up half of the total global internet population. In Southeast Asia alone, the expected growth of digital consumers, hitting 310 million by 2025 was achieved in 2020⁴. With numbers accelerating at this rate, the amount of data and information that people are sharing calls for the need for consumers to be properly protected. However, similar to the rest of the world, the speed of growth is leaving insurers playing catchup and trying to fill the gap. In the meantime, many consumers remain uninformed of prudent cyber hygiene and, therefore, vulnerable.

Hackers are exploiting this vulnerability in the region. Ransomware incidents, online scams, and COVID-19-related phishing activities have all seen a huge spike⁵. In Singapore, for example, cybercrime increased from 9,349 cases in 2019 to 16,117 cases in 2020, meaning it made up for a total of 43% of overall crimes in 2020. At the same time, situations similar to an incident in Mumbai in which a woman was robbed of over 92,000 Rupees (approx. US$ 1250) appear to be rising. Likewise, a simple attempt to sell a used sofa online resulted in a criminal impersonating a buyer and gaining access to the bank account. The amount may seem small, but occurrences such as these are on the rise, affecting individuals on a personal level.

The Covid-19 situation has undoubtedly exacerbated this influx by altering the environment and creating new touchpoints for hackers as people are spending more time online and working virtually⁶. These new variables are changing the way we work and how we perceive the online world around us.

According to research conducted by Norton, 70% and 73% of individuals in India and Japan, respectively, believe that remote work has contributed to an easier playing field for hackers and cybercriminals to take advantage of people. This sentiment is not surprising considering that 66% of Japanese consumers now spend more time online due to Covid. In India, this figure is up to 72%. Naturally, as criminals exploit this societal sea change, social perceptions are lacking confidence. As a result, 63% of consumers in India and 53% in Japan feel more vulnerable to cybercrime since the COVID-19 pandemic.

The main coverage on the market today is Theft of Funds, which generally covers unauthorized electronic transfers of money, assets, or any other funds. However, Personal Lines Cyber offers a wide range of solutions to match the evolving and dynamic cyber threat landscape individuals face. For example, Personal Lines Cyber can cover cyberbullying scenarios by covering individuals for psychological treatment if they fall victim to acts of harassment, intimidation, or defamation online. Additionally, Personal Lines Cyber can also protect personal devices (e.g., laptop, mobile phone, etc.) in the case of a malicious attack that results in high costs to retrieve lost or damaged data.

While commercial cyber insurance remains vital, people need to have more support from the insurance industry. While COVID-19 has changed the landscape, this is not a temporary transformation, and we can expect the way people interact and do business to evolve continuously. As we see people spending more time online, their feelings of vulnerability remain evident of the existing cybercrime threat against them. The insurance industry has the responsibility to cover these risks and generate awareness and educate customers of the various exposures. With people more informed, our resilience strengthens. in this landscape, we must continue to provide adequate risk transfer solutions such as Personal Lines Cyber products and cover people before and after they fall victim to an online crime. The question of “not if, but when” a cyberattack happens no longer only applies to just companies, but individuals as well.

At Munich Re, we are ready to tackle the opportunity of personal lines cyber to protect individuals in the emerging threat landscape. Please contact us if you would like to discuss how we can jointly develop and shape this exciting area of the cyber insurance market.

¹ https://ciotechasia.com/south-koreas-digital-push-to-help-with-economic-recovery/
² https://www.ipa.go.jp/security/vuln/10threats2021.html
³ https://www.thinkwithgoogle.com/_qs/documents/9497/Consumer_Shift_Report_Digital.pdf
⁴ https://www.warc.com/newsandopinion/news/seas-digital-consumer-growth-leaps-past-2025-forecasts-in-a-single-year/43963
⁵ https://www.csa.gov.sg/News/Press-Releases/ransomware-incidents-online-scams-and-covid19-related-phishing-activities-dominated-cyber-landscape-in-2020
⁶ https://investor.nortonlifelock.com/About/Investors/press-releases/press-release-details/2021/COVID-19-Pandemic-Leaves-Consumers-Vulnerable-to-Cybercrime/default.aspx