December 6th, 2018

Cyberattacks Emerge as Leading Risk in East Asia and the Pacific

Posted at 1:00 AM ET

herde_thomasCyberattacks are the leading risk to doing business across East Asia and the Pacific, according to the recent World Economic Forum (WEF) report Regional Risks for Doing Business 2018.

The WEF study surveyed about 12,500 executives across 140 countries on the five biggest risks to doing business in their respective countries over the next 10 years. In Asia Pacific, cyberattacks topped the list in Indonesia, Japan and Singapore. The prominence of cyberattacks as a concern among the region’s businesses reflects the rapid pace of digitization and the increasing sophistication of the region’s economies, the study says.

Thomas Herde, Guy Carpenter’s Head of Casualty Specialty Practice in Asia Pacific, says: “We may be seeing a shift in Asia Pacific as businesses in the regions now recognize the growing risk of cyberattacks and the extent of the damages they may cause.”

Southeast Asia in particular is the fastest growing region in the world in terms of connections to the internet, with a projected 3.8 million new users each month, and estimates that its online economy will reach USD 200 billion by 2025, says the study. These trends make the region a target for criminal and terrorist hackers. In mid-2018, the prime minister of Singapore, Lee Hsien Loong, warned of cyberattacks by terrorist groups, such as ISIS. In June, during the summit between U.S. President Donald Trump and North Korean leader Kim Jong-un, Singapore was reported to be the number one target of cyberattacks in the world, says the WEF study.

“Increasingly, Asian companies acknowledge that cyberattacks pose a threat to business in today’s interconnected world,” Mr. Herde says. “Cyber insurance is a key element of corporate risk management. We have noticed a significant surge in demand for cyber (re)insurance solutions in the last 12 months across all Asian regions.”

The WEF study says the increasing prevalence of e-commerce and the growing popularity of new payment methods across the region have resulted in rising credit card fraud rates, necessitating increased protection measures by the region’s banks.

In China, cyberattacks ranked fifth in the survey as a risk to doing business, but the related risk of data fraud or theft was ranked third. Data fraud or theft was ranked as the leading risk by respondents in Malaysia, a result that may reflect the impact of a case in 2017 involving the attempted sale of more than 46 million mobile phone subscribers’ data. This was among the largest breaches of consumer information ever recorded in Asia, says the study, adding that it is likely to have affected the entire population of 31 million people in Malaysia.

Guy Carpenter’s parent company, Marsh & McLennan Companies, is a strategic partner of the WEF on the global risks agenda.

Download WEF’s Regional Risks for Doing Business 2018 >>

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