Asia-Pacific Manufacturers Face Cyber Insurance Coverage Gap Amid Rising Attacks

• •Manufacturers in Asia-Pacific face a significant uninsured exposure to cyberattacks.
• •Cyber policies exclude physical damage, while property policies exclude cyber-related losses.
• •System intrusion attacks in the region have surged, with manufacturing being the most targeted sector.

Manufacturers in the Asia-Pacific region are increasingly exposed to uninsured losses from cyberattacks, particularly physical damage caused by such incidents. Tokio Marine Kiln (TMK) reports that traditional insurance policies fail to cover cyber-triggered physical damage, leaving a significant protection gap. The manufacturing sector is the most targeted, with system intrusion attacks rising from 38% to nearly 80% of breaches. Despite Asia-Pacific generating over half of global manufacturing output, it accounts for only 10% of global cyber insurance premiums. TMK's data shows that large corporations often purchase extensive property insurance but neglect cyber coverage for their industrial assets. The report highlights that as operational technology becomes more integrated with IT systems, the risk of cyber incidents affecting physical processes is likely to grow. This gap in coverage is attributed to a lack of visible losses, leading to underinsurance in the sector. TMK emphasizes the need for a better understanding of cyber-physical risks to address this issue effectively.