Cyber risks loom as telcos lack comprehensive insurance coverage: WTW

About half of the industry identified cybersecurity as a top threat.

Over a third (36%) of telecommunication (telco) companies stated their insurance insurance covered damage to property only and not business interruption, a higher proportion than the other technology, media and telco (TMT) sectors, according to WTW.

Cybersecurity and data privacy have emerged as the top risks for TMT sectors, driven by their growing reliance on innovations like artificial intelligence (AI), according to the Technology Media and Telecoms Risk Report 2024 by WTW.

The report, based on a global survey of the TMT industry, also highlights concerns over regulation and trade tensions.

About 67% of respondents prioritised innovation, with AI and machine learning seen as major growth opportunities.

Meanwhile, over half (51%) of media and telecom firms, and 46% of tech companies, identified cybersecurity as a top threat. Ransomware attacks were noted as the leading cyber risk by 62%.

More than half (55%) of respondents cited regulation as a barrier to strategic goals, particularly due to increasing government oversight of critical technology and infrastructure.

Additionally, 74% of respondents were concerned about trade disputes, particularly involving China and the West.

Half of the respondents ranked climate change among their top concerns, particularly in media, where 54% expressed concern over the environmental impact of new technologies like AI.

Simon Weaver, head of Asia Pacific and Corporate Risk & Broking at WTW, noted that whilst AI and machine learning present significant opportunities in the region, supply chain disruptions remain a top risk for tech firms. 

“On the other hand, AI and machine learning present the greatest opportunities for the sector over the next two years, particularly with the region’s focus on innovation and 5G expansion by many of the telecoms companies. For media companies, online advertising and AI seems to be most attractive to companies in APAC,” Weaver said.

Conor Keating, Cyber Growth leader for Asia at WTW, pointed out that TMT companies need to apply the same risk management discipline to cyber threats as they do to other business risks. 

“Through this lens, they build a technology strategy that is well-aware of the financial impact of a cyber-related peril and can properly fund its risk management and risk transfer strategies. These include investing adequately in people and tools for defence, and ensuring there is financial protection for the organisation if these defences fail,” said Keating.