Barriers and enablers to adoption of cyber insurance in developing countries: An exploratory study of Malaysian organizations

Cyber insurance presents a compelling value proposition for organizations wanting to reduce risk exposure and recover losses from incidents. However, the adoption rate of cyber insurance outside first-world countries has been relatively low. In this paper we focus on the interesting case of Malaysia – a nation with a low rate of cyber insurance adoption despite its ranking among the top ten countries with the highest level of commitment to cybersecurity. We conducted an exploratory study to investigate the key barriers and enablers to cyber insurance adoption in Malaysia. Following a hybrid approach of deductive and inductive reasoning, we reviewed the literature to identify barriers and enablers to the adoption of cyber insurance. Subsequently, we conducted eight semi-structured interviews with experts from seven Malaysian organizations. Based on the qualitative and quantitative analysis of interviews, we developed a ranked list of twelve barriers and seven enablers to the adoption of cyber insurance. Our study makes two key contributions. First, it contributes to cyber insurance literature by providing the most comprehensive explanation to date for the low rate of cyber insurance adoption in developing countries. Second, our ranked lists provide prioritized guidance to cyber insurance stakeholders (e.g. government, regulatory authorities, insurance providers, and insurance policyholders) on the specific barriers to overcome and enablers to leverage in order to improve the adoption of cyber insurance in Malaysia.