Government ministries and national security facilities that had been in a blind spot for cyber threats such as hacking and ransomware can now receive compensation for cyberterrorism damage.
According to the insurance industry on the 17th, the Financial Services Commission revised the "special agreement on co-insurance for non-life insurance" at the end of Apr. and added cyber insurance and liability insurance to the co-insurance coverage for national security facilities. The agreement was signed in 1977 by 10 non-life insurers and the Korea Fire Insurance Association and has been maintained through several revisions since.
Co-insurance is a system in which multiple insurers share risks that an individual insurer finds difficult to assume alone. Because national security facilities cannot sufficiently provide private insurers with information on facility status and risks for security reasons, a co-insurance framework has been operated by the Korea Fire Insurance Association. The scope includes buildings of institutions directly tied to national security—such as the National Assembly, Ministry of National Defense, Defense Acquisition Program Administration, National Intelligence Service, Presidential Secretariat, Presidential Security Service, and Korean National Police Agency—as well as military supplies.
Previously, co-insurance focused on coverage for physical losses such as fire insurance, comprehensive property insurance, and marine cargo insurance. With this revision adding cyber insurance, the coverage is expected to expand to include damage from cyber incidents such as hacking, ransomware, and personal data leaks, as well as incident response costs. In addition, liability insurance was added, enabling coverage for third-party liabilities that may arise during facility operations.
An insurance industry official said, "Because of their security characteristics, it is difficult for individual insurers to assess and underwrite risks at major national facilities," adding, "including cyber insurance and liability insurance among the co-insurance coverage is a step to reduce blind spots in insurance for national facilities."
As artificial intelligence (AI) technology advances, the risk of cyberattacks is growing. Since last year, hacking incidents have continued at KT, SK Telecom, and YES24. In the private sector, subscriptions to cyber insurance are on the rise. According to the office of lawmaker Lee Hae-min of the Rebuilding Korea Party, corporate cyber insurance contracts last year totaled 7,683, up 42% from a year earlier.
The financial authorities are monitoring hacking threats and seeking additional countermeasures. Lee Eog-weon, chair of the Financial Services Commission, also said at a recent meeting with the five major financial holding companies that "AI that plans and carries out hacking on its own is emerging as a new threat to the financial sector."