Cyber ​​insurance is on the rise as the number of threats increases

MUMBAI : India Inc. is focusing on dedicated cyber security insurance to deal with cyber threats such as malware threats, compromised emails, crypto theft, or incidents of disgruntled employees or adversaries attacking software and systems.

Cyber ​​insurance of India Inc. it is $1-100 million per year, and is growing at 35% per year. In fact, experts said that cyber insurance is the fastest growing insurance sector in India.

Although banks, non-banks and information technology companies were the first to buy cyber insurance cover due to their greater exposure to digital systems and the protection of financial transactions, startups and manufacturing companies are now waking up to the importance of such policies, in particular. post-pandemic, when they digitize all their production and billing processes. “The cyber insurance business is growing at a CAGR (compound annual growth rate) of 30-35% over the last two years. Around 300-400 crore comes from cyber policies alone for insurers now. At least 2-5% of new collections are generated from cyber insurance,” TA Ramalingam, chief technology officer, Bajaj Allianz General Insurance, said.

According to Sanjay Datta, head of underwriting, reinsurance and claims, ICICI Lombard General Insurance Co. Ltd, the cyber insurance market is growing at 50%. The large growth is mainly due to the low, as the insurance of the digital assets of the company three years ago was low due to ignorance. Assets are usually 50-100 times more than their annual cyber insurance premiums.

Insurance costs depend on the size of the company, and consulting firm Aon invests $1 million-100 million in India. Ramalingam said the premiums depend on the company’s operations, the likelihood of loss, and the availability of IT backup systems. “The wages of international companies are higher than domestic companies,” he said.

Industry observers said that after two years of the epidemic, the manufacturing industry has been forced to put in place a process, from payment to procurement, which is one of the most important areas to buy cyber insurance.

But due to frequent cyber attacks, and the number of losses in the last three years, the cost of cyber insurance has increased by 50% in the last year, said Datta.

Cyber ​​criminals often force company managers to stop production and payments through malware, and the entire business comes to a standstill, resulting in significant revenue losses, Bajaj Allianz said.

Recently, a major manufacturer, which purchased cyber insurance cover from ICICI Lombard, suspended operations following a cyber attack. “It had fines for business interruption, legal fees, and more. Our Internet research experts participated in the ‘Golden Hour’ and reduced system damage, with minimal business damage. At the same time, we contacted legal experts to determine the extent of the ransomware entry into the system and help the company restart operations. The policy incurred losses due to business disruptions, legal experts’ fees and costs associated with ransomware attacks,” said ICICI Lombard’s Datta.

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