In India, 2018 saw higher demand for cyber risk insurance. In fact, the demand increased by 40% as compared to 2017’s figures. According to Live Mint, consumers demand this type of insurance even while the application of this financial product is still highly restricted. Some of the first organizations to use risk insurance are information technology-related companies, as well as banking and finance institutions.
A report by Data Security Council of India (DSCI) says that the market for cyber insurance around the world can grow from $4.2 billion in 2017 to a whopping $22.8 billion in 2024. This shows a 27% compound annual growth rate (CAGR).
The Need for Insurance
DSCIA CEO Rama Vedashree says that cyber coverage is highly necessary because of the digitization of various industries. This poses various risks for a data breach with corresponding ‘financial liabilities.’ Vedashree asserts that these policies can facilitate better risk management, while also offsetting costs. Moreover, this is also proving to be a smart move towards elevating the state of preventive and protective measures of various sectors.
While India has not entirely adopted this practice, more entities are demanding for this product, especially with the increased number of cyber-attacks in the country. According to Live Mint, Indian companies underwent serious ransomware incidents in 2018. This resulted in around 350 insurances being sold.
Allianz Risk Barometer 2019 revealed that Indian businesses have higher risks of facing such attacks. Moreover, Sophos’ report says the around 76% of Indian companies experienced attacks in 2018. The cost of these incidents amounted to $10.4 million, according to a study by Microsoft and First and Sullivan.
Meanwhile, IT-related companies, as well as banking and finance Indian organizations have cyber-related insurances amounting to $1 million to $200 million.