As incidents of ransom-ware attack rise — at least 10,000 attacks a day across the world — insurance companies are planning customised standalone products for companies and organisations in India.
Such products are already available in the US. However, in India, insurance companies primarily sell cyber threat products as part of bundled offers covering risks of ‘errors and omission’, ‘computer crime’, ‘commercial crime’, and so on.
“We are looking at designing customised standalone products,” Sanjay Datta, Chief – Underwriting & Claims at ICICI Lombard General Insurance Company, told
India got a real taste of this new-generation crime during the ‘WannaCry’ attack in May impacting businesses in 150 countries. According to a Quick Heal report, there were at least 48,000 attacks in the country.
Apart from the corporate sector, utilities, police and government services were impacted. Ransoms were demanded in Bitcoins from JNPT, West Bengal State Electricity Distribution Company, Andhra Police, panchayats in Kerala and others.
Praveen Jaiswal, co-founder of Kolkata-based cyber defence firm Vehere Interactive, warns: “Companies which track or store customer spending patterns and financial data are amongst the most vulnerable ones.”
Typically, hotels and hospitality; banking and financial services; transport and logistics, and e-commerce are among the most vulnerable sectors.
Nascent market in IndiaIndian companies, however, are still slow to react.
According to Anurag Rastogi, Member of Executive Management, HDFC ERGO General Insurance, only 150-200 companies in the country have taken cyber insurance, with gross underwritten premium of $9-10 million (around ₹60-70 crore).
In comparison, global cyber insurance premium stood at $2.5 billion in 2014. Of this, $2.25 billion, or 90 per cent, was paid by US companies alone.
According to a PwC report, the cyber-insurance premium market could grow to $5 billion by 2018 and to at least $7.5 billion by 2020. “Fast-growing demand for cyber insurance offers are huge commercial opportunity for insurers,” it further said.
Sources in e-commerce companies and at least one FMCG major acknowledged the need for greater cyber security coverage.
The risk is not merely for large corporates or organisations, even individuals may be affected.
HDFC ERGO has identified retail cyber insurance as a potential segment and is working towards having offerings in this category. Currently, no insurer in India offers products in this segment.
“We are in the process of developing and filing retail cyber products,” Rastogi added.
State-run National Insurance Company, too, is in talks with specialised brokers and reinsurers to tap this segment.