The COVID-19 pandemic has disrupted organisational functioning and intensified technological and financial risks. There has been an increase in internet usage as people are working from home, thus increasing the chances of cyber-crime. According to ICICI Lombard General Insurance, in the third week of June, hackers in China made 40,300 cyber attacks on India that were facilitated by COVID-19 scams. Considering the delicate situation rising from the work from home policies permitted by organizations, this is indeed the time for people to remain alert. Earlier cyber-security insurance was primarily accepted by corporate which are now being increasingly demanded by retail customers and individuals working from home.
Increase in Cyber Risks
Employees working from home have started their inquiry for cyber insurance. As companies are permitting work from home, individual policy for cyber insurance is likely to get established soon. Few common cyber risks include malware attack, phishing, spoofing, and identity theft, among others. Employees remotely logging in are making it easier for cyber criminals to conceal themselves while attempting to access systems with personal and sensitive data. Owing to the pandemic, the hackers are exploiting the current situation by luring people into clicking links containing malicious payloads. Some possible threats can be:
- Use of COVID-19 as a subject to carry out phishing,
- Malware distribution can be done through coronavirus themed lures,
- Registration of domain names having words related to coronavirus or COVID-19.
Growing Demand for Cyber Insurance
Increasing digitalization by businesses, rise in awareness of cyber security, uneasiness regarding the implications of GDPR and India’s Personal Data Protection Bill have led various companies to consider buying insurance. Demand for cyber retail cover is likely to come from millennial as they are the most internet savvy. In 2018, DSCI observed a 40% increase in cyber-security insurance purchase in India. The cyber insurance market is expected to grow globally at a CAGR of 27% from INR 29,400 in 2017 to INR 1.59 lakh crore in 2024.
The Chief Technical Officer of Bajaj Allianz General Insurance Sasikumar Adidamu said that as work from home has led employees to use their own home system, they might not necessarily have the kind of firewall that is present in the office system. They are expecting a demand for insurance as surge in internet usage has increased the likeliness of cyber fraud incidents. Bajaj Allianz General Insurance has not only witnessed a surge in inquiries, but has also been approached by companies to increase the limit of cyber cover as they are now experiencing the possibility of future cyber risks. ICICI Lombard that earlier used to get enquiries from BFSI and IT companies, is now getting contacted by various sectors like education, SMEs and hospitality. IT, telecom, e-wallet service providers, telecom, banks, financial institutions have majorly demanded for cyber security as they handle a large amount of data. But lately traditional manufacturing and infrastructure companies have begun to demand as well.
Insurance companies offering cyber insurance
- Bajaj Allianz: Bajaj Allianz started retail cyber security in the end of 2017. They have seen a CAGR of approximately 50 percent in premium in its cyber insurance portfolio. They provide cover against identity theft, phishing, Email spoofing, cyber extortion, media liability, and malware attacks, among others.
- ICICI Lombard: they provide protection against cyber and digital risks that result in financial loss. The Retail Cyber Liability Insurance policy by ICICI will provide cover against cyber bullying, malware intrusion, and cyber extortion, among others. It also covers ‘individual lost wages’ and ‘reputation injury’.
- HDFC Ergo: they cover all the devices under a single insurance plan. Regardless of the age of the children, their policy covers the whole family from cyber crimes. It provides protection against phishing, email spoofing, and damage to e-reputation.
Cyber insurance has a huge potential in mitigating cyber loss. As several insurance companies are providing policies that cover an entire family and protection against damage to e-reputation, it plays a significant role in protecting against cyber crime. As the ‘better normal’ is witnessing employees comfortably working from home, growth in demand for insurance is certain as a huge amount of sensitive data is being handled remotely.
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