Since the pandemic, businesses are waking up to cyber risk management. Cyber insurance might be the fastest-growing insurance sector in India today. This comes with a unique set of challenges that regulators and insurers need to address quickly. Here are 5 recommendations for the stakeholders
The Indian business sector is increasingly buying cyber insurance coverage to shield itself against the adverse impact of pervasive cyber threats that include malware attacks, email comprises, phishing, insider attacks, crypto-jacking, and (nation-state) sponsored cyber-attacks on critical infrastructure-driven businesses. The amount of yearly cyber insurance coverage companies usually buy ranges from $1 million (small companies) to $200 million (large IT service providers) and it is growing at a CAGR of 35 percent for the past three years (Source: DSCI). According to T. A. Ramalingam, CTO of Bajaj Allianz General Insurance, at least 2-5 percent of the overall premium collection in recent years from their business was generated from sales of its cyber insurance division. This growth rate has compelled insurance experts in companies such as Bajaj Allianz, ICICI Lombard, Tata AIG, HDFC Ergo, and Lloyds India—major cyber insurance policy carriers in India—to claim that cyber insurance might be the fastest-growing insurance sector in India today. This is primarily because companies in nearly every sector—startups, manufacturing, transportation, banks, non-banks, IT service, health, and retail—are steadily digitising their entire workflow for increased ROI and business process efficiency reasons, and are waking up to the cyber-risk management importance of such policies, especially post-pandemic.
[This article has been published with permission from IIM Calcutta. www.iimcal.ac.in Views expressed are personal.]