Raising cyber insurance market up to developed country scale
Lee Gyung Tak | kt87@ | 2017-06-15 11:21:49
The government will work out “cyber insurance development plan” by the end of the year. The plan is to catch up with advanced cyber insurance countries such as U.S. and U.K.
On Jun. 14, according to the Ministry of Science, ICT and Future Planning, the Ministry of Science, ICT and Future Planning will make a research agreement of “cyber insurance policy project” with Korea Consortium of Computer Emergency Response Team (CONCERT, chief officer Yoo Jin-ho as early as Jun. 16, and work out a policy and a system for boosting the domestic cyber insurance market until next December.
The domestic cyber insurance market scale is estimated at approximately 30 billion won, and the Ministry of Science, ICT and Future Planning judged the cyber insurance market is still in the initial stage. The banking industry currently takes out liability insurances for personal information leakage, limited to 2 billion won, 1 billion won, and 500 million won depending on the scale under Credit Information Act, but in fact the insurances are far from international cyber insurances due to lack of related products of insurance companies and demands. In Korea, some types of basic cyber insurance provided by AIG, Samsung Fire & Marine Insurance and the like are all.
However, the industry related to cyber insurance that an insurance company compensates for damage caused by an accident such as hacking happening in cyberspace is growing fast around U.S., U.K. and the like where insurance systems are developed. According to Korea Insurance Research Institute, the cyber insurance market scale in U.S. is rapidly growing 26-50% every year, and the cyber insurance market scale in the world is expected to increase to $5.9 billion (6.65 trillion won) until 2023.
“Application to liability insurance such as the cyber insurance is more like recommendations except for some banking industries, and thus there is an argument for revising the law for insuring obligation, but that will impose a burden on business” said an official of the Ministry of Science, ICT and Future Planning, and “we will find the way to boost cyber insurance in the private sector through this policy research without obligation or law revision” said the officer. And “the domestic cyber insurances are currently focused only on third party liability, but a directly damaged company should be compensated like an automobile insurance such that the related demand increases” explained the officer.
But, the possibility of a kind of “moral hazard” that companies take cyber insurances and neglect related security investment is pointed out. Therefore, the Ministry of Science, ICT and Future Planning has a plan to come up with product development measures and the like of offering incentives for security products and services if a company took an insurance by connecting insurance companies and information security companies. The measure of giving discount of insurance commission to subscribers of Information Security Management System (ISMS), which should be directly decided by the insurance company, is also stated.
“Cyber insurance market just started to grow now excluding some advanced countries like U.S. and Korea is not too late” said Kim Tae-sung, a professor in the Department of Information Security Management at Chungbuk National University, and “the insurance market in Korea is not developed as much as IT industries, and thus cooperation between security business and insurance business is needed and it is necessary to develop a standard dictionary to expand communication between both businesses” he advised.
“Cyber security is necessary to accomplish the fourth industrial revolution, and it is impossible to completely defense all the attacks” said an industrial official, and “the technical development is important, but preparation for security risk can be achieved through the cyber insurance system” said the official.
By Lee Gyung Tak kt87@
[ copyright ⓒ The Digitaltimes ]
On Jun. 14, according to the Ministry of Science, ICT and Future Planning, the Ministry of Science, ICT and Future Planning will make a research agreement of “cyber insurance policy project” with Korea Consortium of Computer Emergency Response Team (CONCERT, chief officer Yoo Jin-ho as early as Jun. 16, and work out a policy and a system for boosting the domestic cyber insurance market until next December.
The domestic cyber insurance market scale is estimated at approximately 30 billion won, and the Ministry of Science, ICT and Future Planning judged the cyber insurance market is still in the initial stage. The banking industry currently takes out liability insurances for personal information leakage, limited to 2 billion won, 1 billion won, and 500 million won depending on the scale under Credit Information Act, but in fact the insurances are far from international cyber insurances due to lack of related products of insurance companies and demands. In Korea, some types of basic cyber insurance provided by AIG, Samsung Fire & Marine Insurance and the like are all.
However, the industry related to cyber insurance that an insurance company compensates for damage caused by an accident such as hacking happening in cyberspace is growing fast around U.S., U.K. and the like where insurance systems are developed. According to Korea Insurance Research Institute, the cyber insurance market scale in U.S. is rapidly growing 26-50% every year, and the cyber insurance market scale in the world is expected to increase to $5.9 billion (6.65 trillion won) until 2023.
“Application to liability insurance such as the cyber insurance is more like recommendations except for some banking industries, and thus there is an argument for revising the law for insuring obligation, but that will impose a burden on business” said an official of the Ministry of Science, ICT and Future Planning, and “we will find the way to boost cyber insurance in the private sector through this policy research without obligation or law revision” said the officer. And “the domestic cyber insurances are currently focused only on third party liability, but a directly damaged company should be compensated like an automobile insurance such that the related demand increases” explained the officer.
But, the possibility of a kind of “moral hazard” that companies take cyber insurances and neglect related security investment is pointed out. Therefore, the Ministry of Science, ICT and Future Planning has a plan to come up with product development measures and the like of offering incentives for security products and services if a company took an insurance by connecting insurance companies and information security companies. The measure of giving discount of insurance commission to subscribers of Information Security Management System (ISMS), which should be directly decided by the insurance company, is also stated.
“Cyber insurance market just started to grow now excluding some advanced countries like U.S. and Korea is not too late” said Kim Tae-sung, a professor in the Department of Information Security Management at Chungbuk National University, and “the insurance market in Korea is not developed as much as IT industries, and thus cooperation between security business and insurance business is needed and it is necessary to develop a standard dictionary to expand communication between both businesses” he advised.
“Cyber security is necessary to accomplish the fourth industrial revolution, and it is impossible to completely defense all the attacks” said an industrial official, and “the technical development is important, but preparation for security risk can be achieved through the cyber insurance system” said the official.
By Lee Gyung Tak kt87@