Newspaper article The Daily Yomiuri (Toyko, Japan)

Companies Take out Cyber Insurance

Newspaper article The Daily Yomiuri (Toyko, Japan)

Companies Take out Cyber Insurance

Article excerpt

There has been a sharp increase in the number of policyholders -- mainly companies -- taking out cyber insurance, which compensates losses caused by cyber-attacks.

The number of victims whose personal information was stolen last year from companies and other entities rose by more than 10 million from the previous year.

The estimated compensation paid by the affected companies also increased to nearly 300 billion yen.

"It [the spread of cyber insurance] probably indicates an increasing number of companies that now regard cyber-attacks as management risks," a risk management expert said.

Cyber insurance mainly covers risks related to cyber-attacks. The risks include costs of compensation for damage from information theft, costs of research on possible damage, and losses from the suspension of sales activities or assembly lines.

Some cyber insurance also covers the costs for research, conducted when it is feared that companies might have come under a cyber-attack, and subsequent advertising used to apologize for effects of the attack.

In Japan, the first cyber insurance services were marketed in 2013. In 2015, major non-life insurers introduced their own cyber insurance services in succession.

The numbers of cyber insurance policies in fiscal 2016 rose from the previous period. Mitsui Sumitomo Insurance Co. said it increased by 250 percent; Tokio Marine & Nichido Fire Insurance Co. said it roughly tripled; AIU Insurance Co. said it increased by 50 percent, while Sompo Japan Nipponkoa Insurance Inc. said it increased by 350 percent in terms of premiums paid.

Behind the increase of the number of cyber insurance policies is the realization companies have come to, recognizing the sizable losses from information theft that can hamper business. …

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