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Editorial: Information Security Also Needs an Insurance Safety Net

Security2 min read

This editorial says Korea needs a stronger cyber insurance system. Recent data leaks and AI hacking attacks have made people worried, but very few companies buy enough cyber insurance to cover big losses.

What happened

A series of personal data leaks and AI-based hacking attacks has made people in Korea feel uneasy. Many kinds of industries have been targeted, including IT companies, telecom firms, big retailers, OTT (video streaming) services, and banks. Even so, the insurance system that helps pay for damage and helps companies recover is still very small. The editorial argues that this is a serious problem.

Key numbers

  • Korea's yearly cyber insurance market is about 60 billion to 65 billion won, based on expert estimates.
  • France has about 1.3 times Korea's population. Its yearly cyber insurance premiums are about 306 million euros (about 489.6 billion won), roughly 8 times Korea's.
  • The United States has about 6.8 times Korea's population. Its yearly cyber insurance market is about 9.46 billion dollars (about 13.244 trillion won), more than 200 times Korea's.
  • Five major Korean non-life insurance companies have only a few hundred cyber insurance contracts in total.
  • Most companies buy only the legal minimum coverage of 1 billion won.

Why the system is weak

Cyber insurance pays companies or victims after a hack or data leak. The editorial says the main causes are weak punishments, small compensation rules, and a careless attitude among company leaders. Some advanced countries use punitive damages, which can make a company pay so much that its survival is at risk. Korea's compensation amounts are far smaller, so companies see cyber protection as an unneeded cost.

Why it matters

When tens of millions of personal records leak, a company's payment limit of 1 billion won means victims have little real protection. The editorial says companies need to treat cyber insurance as a basic way to manage risk, just as drivers need car insurance. Strong security walls are important, but a strong system to pay for damage is also needed to protect people when accidents happen.

What to watch

  • Whether Korea changes its rules on punitive damages and compensation.
  • Whether companies raise their cyber insurance coverage above the 1 billion won legal minimum.
  • How insurance companies expand cyber insurance products and their number of contracts.

Glossary

OTT
Online video services that send movies and TV shows over the internet, such as streaming apps.
Cyber insurance
Insurance that helps pay costs when a company suffers a hacking attack or data leak.
AI hacking
Cyberattacks that use artificial intelligence to find weaknesses in computer systems faster.

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