As cyber-attacks increasingly target industrial systems, manufacturers across Asia-Pacific face a growing cyber physical damage protection gap, according to a recent report by specialist insurer, Tokio Marine Kiln (TMK).
In 2024, the Asia-Pacific region emerged as the primary global target for cyber incidents, accounting for approximately one third of all global cases and seeing a 13% increase year over year.
Manufacturing is the region’s most targeted industry, where system intrusion attacks have surged from 38% to nearly 80% of regional breaches.
This rise in activity exposes a critical vulnerability, the fact that traditional insurance structures may not respond as expected where cyber events affect physical operations.
Cyber policies typically exclude physical damage, while property policies exclude cyber-related perils; creating a potential coverage gap for cyber physical damage events and ensuing business interruption.
TMK’s underwriting data also revealed a gap between insurance purchasing trends and underlying exposure. While large regional corporations buy multi-million-dollar property programs for industrial assets, they often leave them uninsured against cyber-attack losses.
Sectors like manufacturing, logistics, healthcare, utilities and power generation businesses are among the most exposed, mainly due to their reliance on interconnected systems and operational technology.
According to the report, highly integrated production networks mean disruption in one location can have wider regional and global consequences.
Georgie Furness‑Smith, Cyber Underwriter at TMK Asia, said: “As operational technology becomes more integrated with IT systems, cyber-attacks are increasingly targeting systems that control industrial activity, raising the potential for disruption to physical operations impacting machinery, facilities and production processes.
“One of the reasons this risk remains underinsured is that it has not yet translated into a large number of visible losses, so it is not always prioritised by buyers. However, the underlying risk is building. We are seeing more attacks targeting the systems that control industrial operations, while the way these risks are assessed and insured is still largely based on traditional IT exposures.”
She concluded: “Insuring cyber physical damage risk requires a different level of understanding – not just of cyber security, but how industrial systems behave under stress. That is where the gap between exposure and protection becomes most pronounced.”
According to TMK the potential for cyber incidents affecting physical processes is likely to grow, mainly driven by the increase in automation, industrial connectivity and AI-driven systems.
Even though specialist insurance solutions are beginning to emerge, they are limited, with TMK being one of the few insurers providing affirmative cover designed to address cyber-triggered physical damage and resulting business interruption, the firm stated.
