As large-scale hacking incidents and personal data breaches continue to rise, the demand for corporate cyber risk management is increasing. The corporate cyber insurance market, which covers liabilities arising from hacking and data breaches, is also experiencing rapid growth. However, experts point out that institutional improvements, such as raising mandatory coverage limits, are necessary for further market expansion.
According to the insurance industry on August 3, the first-quarter gross premiums for corporate cyber insurance from six major non-life insurers—Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, DB Insurance, KB Insurance, Meritz Fire & Marine Insurance, and Hanwha General Insurance—totaled 16.6 billion won, a 46.5% increase from 11.3 billion won during the same period last year.
Notably, the gross premiums for 'cyber package' products, which cover both self-damage and third-party liability, doubled from 5.8 billion won to 11.6 billion won, driving market growth.
During the same period, the number of new contracts rose by 5.2%, from 1,537 to 1,617. The total number of contracts also increased from 5,085 to 5,381.
The growth of the cyber insurance market is attributed to the heightened demand for risk management among companies following a series of major cyber incidents. High-profile cases, such as the SK Telecom SIM card hacking and the Coupang data breach, have raised corporate awareness of cyber risks. Hanwha General Insurance established the industry's first dedicated cyber insurance team in November 2014 and has since provided consulting services to over 70 companies.
However, there are concerns that the domestic cyber insurance market needs institutional improvements to sustain its growth. Under the current enforcement decree of the Personal Information Protection Act, the mandatory coverage limit is only 1 billion won. Industry experts argue that this limit does not adequately reflect the potential damages from large-scale data breaches. Following a major incident, SK Telecom also increased its insurance limit to 100 billion won.
An insurance industry official stated, “As hacking and data breach incidents continue to occur, inquiries about corporate cyber insurance are steadily increasing. Given the low mandatory coverage limit under current law, sufficient compensation is difficult in the event of an actual incident, highlighting the need for institutional improvements to enhance the effectiveness of cyber insurance.”
* This article has been translated by AI.
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