Cyber Insurance: Baby Steps For A Big Leap?

Cyber insurance in India is at a nascent stage and there is an effort required to create an awareness about its critical role in countering cyberattacks:

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A report prepared by US-based Allied Market Research put the cyber security market size at $104.60 billion in 2017 and projected to grow to $258.99 billion by 2025, a CAGR of 11.9% from 2018 to 2025. As cyber threats become universal, finding security solutions too have become critical. Alongside, corporates have become aware of the relevance of cyber insurance as the threats change faster and solutions sometimes become inadequate. Today, protecting the computing environment is almost obsolete and security experts are looking at having a strong cyber security governance in place marked by coordinated efforts to make the entire information ecosystem penetration-proof and having strong cyber insurance cover. In fact, cyber insurance sits atop all other security measures, which are prone to fail at some time or other, and there are expenses towards retrieving the system and meeting damages on account of litigation initiated by affected customers. Cyber insurance, especially for banks and financial services institutions, is expected to cover the main concerns and protect and business loss in case of a cyber attack. Ideally it covers first-party and third party liability.

Anurag Rastogi, member of executive management, HDFC ERGO General Insurance, points out that the penetration of internet is growing at a rapid rate in India with smart devices being an integral part of our lives. “Owing to this and the increase in cybercrimes and frauds, there is a demand for cyber insurance among corporates as well as individuals in India and cyber insurance, therefore, is constantly evolving to cover the growing cyber risks across the globe,” says he.

However, he admits while there is a rise in demand for cyber insurance, the adoption is still limited.

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