The government has decided to develop standards for insurance that covers damages from cyber-attacks in an effort to encourage more private companies to sign up for such insurance, it has been learned.

A new system is planned in which the level of companies’ security measures will be assessed, and private insurance companies will then use the criteria when calculating insurance premiums. Insurance products will be promoted and companies encouraged to prepare for cyber-attacks.

Cyber insurance currently covers such items as the cost of hiring experts to trace the route of a computer virus and compensation payments to customers for information leaks and other losses due to business suspensions. Although some private insurance firms handle such insurance products, the participation rate in Japan is reportedly lower than that of the United States and other nations.

Observers believe Japanese companies are not as proactive in providing detailed information about the scope of the damage from a cyber-attack as they fear information leaks.

The companies are, therefore, reluctant to purchase any insurance products that would require the revelation of such information.

To change this situation, the government envisages a new system in which an independent public institution would analyze the companies’ information regarding the damage incurred and convert it into anonymous data before providing it to industry groups and insurance companies.