How GIA plans to solve the SMEs' underinsurance versus cyber threats
Only 17% of SMEs are covered against cyber threats.
Around 99% of the 560,000 registered businesses in Singapore are categorised under small and medium-sized enterprises (SMEs). Of these SMEs, only 17% are insured against ransomware attacks. That means only approximately 94,000 SMEs are prepared to face cyber threats, the biggest risk to businesses in this digital era, warned the General Insurance Association of Singapore (GIA).
In an interview with Asian Business Review, GIA President Ronak Shak said the lack of awareness amongst SMEs is the main reason that keeps them from adequately protecting themselves.
“They don't know how badly they're going to be hit the moment a cyber breach occurs, how much it is going to cost them. How much data are they going to lose? Will they lose access to their clients? Will their business be shut down as a result?,” Ronak explained.
Ronak’s claim is backed up by QBE Singapore reporting that only 45% of SMEs are aware of cyber insurance. But what was prevalent in most organisations in Singapore is that they are confident that cyber-attacks will not happen to them.
“62% of SMEs have indicated that they would prioritise other things, rather than getting protected by insurance,” Ronak shared.
GIA has been relentless in promoting and advocating greater public and private and cross-sector collaboration. Through this, a more comprehensive understanding of cyber risks across industries will be built, with its main purpose being to provide valuable cyber propositions to protect vulnerable businesses.
What Ronak wants is for cyber insurance to be compulsory in Singapore.
“It is not different from if you're driving a car, you need to have motor insurance. If you're using a computer and you are connected to the internet, which pretty much everyone is, then the need for cyber insurance has never been greater,” he said.
“Cyber hygiene, or having the right approach to cybersecurity, should be the top priority for SMEs. Then they can reinforce that with the use of insurance. This is where cyber insurance comes into play,” he explained.
GIA’s overall plans
Aside from focusing on pushing cyber insurance awareness, Ronak, who helmed GIA early in 2022, will also be pushing to elevate the culture and conduct standards in the insurance industry.
Singapore’s Insurance Culture and Conduct Steering Committee published three papers in 2022 providing best practice guidelines and recommended initiatives for stakeholders within the insurance ecosystem to elevate the culture and conduct standards of insurance companies, intermediaries, employees, and the insurance ecosystem.
Ronak said the fourth paper for general insurance intermediaries is already in progress and is expected to be published by the end of the year.
“The sector will also be working closely with the Ministry of Manpower to implement enhanced medical insurance coverage for work permits, and for S-pass holders. This would seek to improve the health and well-being of foreign workers here in Singapore. We are also in close partnership with the Ministry to ensure seamless implementation of the enhanced medical insurance model and aim to roll this out towards the end of 2022,” Ronak shared.