Cyber insurance opportunities abound in the Philippines and its neighboring countries where protection is still low, according to global reinsurance broker Gallagher Re.
"The greenfield opportunity is particularly large for markets we identify as 'up-and-comers', like Thailand, Malaysia, Vietnam, Indonesia, and the Philippines, but equally, the emerging giants of China and India still have plenty of room for penetration rates to improve," Gallagher Re said in its report "Protecting the Digital Revolution: The state of the Asian cyber insurance market in 2024" published in September.
In 2023, only $3-million worth of cyber premiums were sold in the Philippines, accounting for merely 0.1638 percent of gross written premiums (GWP) or sales of non-life insurers here, Gallagher Re data showed.
Measured against gross domestic product (GDP), the cyber insurance penetration rate in the country last year stood at 0.0008 percent, below the 0.0025-percent average in Asia-Pacific.
"The rising frequency of cyber threats in the Philippines underscores the need for a robust regulatory framework and increased adoption of cyber insurance," Gallagher Re said.
It cited that the Philippine government this year approved its national cybersecurity plan, aimed at addressing the country's existing cyber-security gap.
"This comprehensive plan focuses on protecting critical infrastructure, improving government network security, educating the workforce on cybersecurity, and reviewing existing cyber-related laws and regulations such as the Cybercrime Prevention Act," Gallagher Re noted.
Michael L. Rellosa, executive director at the non-life insurance industry group Philippine Insurers and Reinsurers Association (PIRA), agreed that cyber insurance has a big business potential in the domestic market.
"It should be, because everything is already based on digitalization. And we are being targeted" by cybercriminals, Rellosa told Manila Bulletin on the sidelines of the launch of the Insurance Consciousness Month on Tuesday, Oct. 1.
At least four non-life companies are now offering cyber insurance products locally, Rellosa noted. "It's growing — it's not that big; it just started. But it will grow."
Rellosa pointed out that the good thing about cyber insurance is it not only offers corporate but also personal coverage, such as that for online purchases and transactions as well as identity protection.
Gallagher Re data showed that the Philippine non-life sector's GWP last year amounted to $1.919 billion, the lowest among the five Southeast Asian countries covered by the report, which also included Indonesia, Malaysia, Thailand and Vietnam.
The non-life insurance penetration rate in the Philippines stood at 0.5 percent in 2023, also the lowest in the region alongside Indonesia. In comparison, non-life penetration in Asia-Pacific was at 1.5 percent
Including life insurers, the total insurance penetration rate in the country last year reached 1.9 percent of GDP, the second lowest after Indonesia's 1.4 percent and lower than the average of five percent in Asia-Pacific.
The Philippines also had the smallest insurance industry-wide GWP in the region, amounting to just $7.466 billion in 2023.