India’s Cyber Insurance Business Is Flourishing
Cyber risk is a major threat to Indian businesses today as companies increasingly face new vulnerabilities due to exposure.
In an exclusive interview with BW Businessworld, Rahul Mohata COO, Ideal Insurance speaks about how organisations can minimise the financial impact due to a cyber-attack if they opt for an insurance, awareness among businesses regarding cyber-attacks and more.
Here are some extracts:
How can organisations minimise their financial impact if they opt for cyber liability insurance?
All businesses now are dependent on the use of technology specially internet and cloud, which makes them vulnerable of cyber-crime and online data theft and misuse.
Cyber liability policies are indemnity policies and cover any loss which may arise because of the peril covered under the policy. The client based on his assessment or legal requirement buys a policy with an indemnity amount. The insurer generally covers privacy breach liability, cyber extortion, business interruption losses, liability from multimedia and public relations costs, legal expenses and data theft liability.
If the data is stolen or hacked, the insurer will pay for any legal cost which the insured pay if there is a suit filed in a court of law. The Insurer will also indemnify the amount awarded by the court of law subject to admissibility of the claim by the Insurer.
Do you see the awareness among businesses regarding cyber-attacks in India?
The 'Internet Security Threat' report that was released in 2013 by Norton (Symantec) has stated India has 42 million cyber-crimes every year. On a regular basis we come across press reports on breach of cyber security by way of attacks such as malware, viruses, hacking, scams, fraud and theft.
Though the large corporates are still aware and work towards cyber security, but the mid-size and small enterprises are highly vulnerable towards such risk due to lack of awareness.
In a data driven world, if a company suffers a data breach but can’t monetise the value of that data, how can this insurance help?
Since the insurance cover is for paying for any legal cost which the insured pay if there is a suit filed in a court of law. The insurer will also indemnify the amount awarded by the court of law subject to admissibility of the claim by the Insurer. Hence, the question of monetising the data does not arise in this case.
Do you believe that companies in India compromise with their cyber security?
There are corporate who have taken this policy. However, there is a huge gap and it is mostly due to lack of awareness and has become obligatory and not mandatory as the check and balances are not yet in place.
How has been the response like especially when MSMEs in India are not very active on this front?
The smaller firms are often hit hardest by a cyber-attack but unfortunately lack of awareness about cyber risk prevents most of the MSMEs in India from adopting key cyber security initiatives. But very soon companies of every size will demand cyber insurance, as most of the businesses are depended on technology.
How do you make this insurance policy customer friendly?
These policies are tailor made and as per requirement of the customers. Cyber risk affects industries such as technology and financial institutions differently so tailor made solutions suiting each client segment is suggested. Due diligence is specially done for companies with internet-related operations and large technology-related and also for those storing a large quantity of customer data.
Cyber-attacks on cloud environments have reached the same level as attacks on traditional IT infrastructures, and it seems likely that the trend towards cyber-attacks on cloud based infrastructures will see further increases. So, do you provide insurance against such attacks?
Yes, covers are available for such risks. In these cases, the cloud based service provider will have to take insurance which will protect him against any perils of cyber-attack and breach which will result in loss to his customers who store their data on their cloud based services.
Since cyber-space has become highly vulnerable, do you believe that some years down the line, there will be a huge surge in such insurance policies?
The cyber insurance market is already flourishing owing to the increase in cyber-attacks. And in the coming years the market is expected to grow at double-digit figure, and a significant surge in demand for cyber insurance policies is also predicted.
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