Lexasure Financial Group Limited (Lexasure), a specialist in reinsurance, insurance, and insurtech solutions across South and Southeast Asia, has recently announced a strategic collaboration with OneDegree Global (ODG). ODG is the technology division of OneDegree Group, recognized for its cutting-edge IXT insurtech solutions and Cymetrics cybersecurity services. Together, they have launched an innovative cyber insurance solution, first showcased at the ITC Asia conference in Singapore, held from June 4 to 6, 2024. The unveiling of this new product marks a significant advancement in addressing the growing cybersecurity concerns that Asian businesses face amid ongoing digitization efforts. At the heart of this initiative is a Reinsurance-as-a-Service (RAAS) platform, which leverages advanced technology to provide real-time risk assessment and nearly instant policy issuance, specifically tailored for small and medium enterprises (SMEs).
A New Era of Cyber Insurance
The core feature of this new cyber insurance solution is its RAAS platform, noted for its advanced cyber risk assessment capabilities. This potent tool is particularly vital for SMEs in the Asia-Pacific region, which have increasingly become targets for cyberattacks and ransomware due to their rapid digitization. Ian Lim, Lexasure’s CEO, stressed the considerable financial and reputational damages that businesses face from such cyber threats, making cyber insurance an essential safeguard. The RAAS platform operates by offering real-time risk assessments coupled with instant policy issuance, streamlining what has traditionally been a cumbersome and slow process. This is achieved via a sophisticated cyber risk exposure scanning mechanism integrated into the underwriting workflow, allowing insurers to generate a company’s security score on the spot. For eligible businesses, this enables policy issuance within just 10 minutes.
This digital transformation is particularly significant given the current landscape of cyber threats in the region. According to a report by Cisco, 56 percent of small and mid-sized enterprises in the Asia-Pacific region have experienced a cyber incident in the past year. Despite this high incidence rate, the cyber insurance market remains underdeveloped, with cyber policies accounting for less than one percent of the total insurance market in Asia and Oceania, as per the IAIS’ Global Insurance Market Report 2023. This disparity underscores the urgent need for a more robust cyber insurance framework, which the RAAS platform aims to address by making comprehensive policies more accessible and easier to manage for SMEs.
Addressing Underinsured Risks
Michelle Ip, CEO of OneDegree Global, shed light on the substantial risks small and mid-sized enterprises face from cyber threats, often resulting in significant uninsured or underinsured losses. These gaps in coverage can include vulnerabilities such as compromised emails or ransomware attacks, which can be financially crippling for SMEs. The new cyber insurance solution from Lexasure and ODG is designed to help businesses better understand their coverage and mitigate potential gaps. Through real-time security assessments, SMEs can gain insights into their vulnerabilities and take proactive measures to strengthen their defenses.
Additionally, the RAAS platform enhances the customer experience by digitalizing every step of the insurance process, from onboarding to policy issuance. Insurers and their distribution channels can now offer a fully digital and streamlined service, significantly reducing the time and complexity traditionally involved in procuring cyber insurance. This advancement is poised to boost the adoption rate of cyber insurance among SMEs, fostering a more resilient business environment in the region.
Bridging the Insurance Gap
Michelle Ip, CEO of OneDegree Global, highlighted the severe risks that small and mid-sized enterprises (SMEs) face from cyber threats, which often lead to substantial uninsured or underinsured losses. These coverage gaps can include threats like compromised emails and ransomware attacks, which can financially devastate SMEs. Lexasure and ODG’s new cyber insurance solution aims to help businesses better understand their coverage and address potential gaps. With real-time security assessments, SMEs can identify their vulnerabilities and take proactive steps to bolster their defenses.
Moreover, the RAAS platform significantly enhances the customer experience by digitalizing every part of the insurance process, from onboarding to policy issuance. Insurers and their distribution channels can now offer a fully digital and streamlined service, substantially reducing the time and complexity typically involved in acquiring cyber insurance. This innovative approach is expected to increase the adoption rate of cyber insurance among SMEs, thereby promoting a more resilient business environment in the region.