The Ministry of Science, ICT & Future Planning of South Korea announced last week that it has signed a research agreement with the Consortium of Computer Emergency Response Team to develop government policies and infrastructure needed to boost the development of the domestic cyber insurance market.
South Korea’s cyber insurance sector, which is still in its infancy, is estimated to be worth KRW30 billion (US$26.46 million). While the Use and Protection of Credit Information Act requires financial institutions to have liability insurance, it does not include cyber insurance.
The lack of demand for and availability of cyber cover needs to be addressed, said the ministry. Currently, only a few insurers, such as
AIG and Samsung Fire & Marine Insurance, are offering a limited number of basic cyber insurance policies to compensate for damages and losses caused by hackers and other cyber criminals.
This puts South Korea, ironically the most internet-connected country in the world, behind the US and the UK in terms of cyber insurance. According to the Korea Insurance Research Institute, the US cyber market is growing at a pace of 26% to 50% annually, and the global cyber insurance market is expected to be worth US$5.9 billion in 2023.
“The growth of the cyber insurance industry has just begun in the majority of countries other than some advanced ones like the United States and there is still time for South Korea,” Prof. Kim Tae-sung at the Department of Information Security Management of Chungbuk National University, told Business Korea.
“South Korea’s insurance market is less developed than its IT industry and, as such, cooperation between its security and insurance sectors is essential as of now, and the cooperation can start from the development of a standard glossary for more communication between the two sides,” he added.
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