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Cyber fraud cases rising, but few takers for cyber insurance | #cybercrime | #computerhacker

The rising number of cybercrime cases has brought the spotlight on low penetration (how many people have it) of cyber insurance in the country, and this trend is more pronounced in Telangana.

The State received 71,426 complaints out of the 11,28,265 registered with the Citizen Financial Cyber Fraud Reporting Management System in India in 2023.

With 15% detection, Telangana also emerged as the hotspot for malware attacks last year. This was followed by Tamil Nadu with 14% detection, as per the Data Security Council of India (DSCI).

The two Telugu speaking States have much lower cyber insurance penetration of about 20%, compared to the Indian average of 30%.

Financial buffer

Cyber insurance, available for both corporates and individuals, essentially offers a financial buffer against the crippling costs associated with data breaches and cyber-attacks and can be customised as per the requirement.

“While cyber insurance penetration is prominent among a few top Indian banks and leading IT firms, small and midsize enterprises and start-ups are now catching up,” said Evaa Saiwal of Policybazaar for Business.

Cyber insurance is a subset of liability insurance. Though clear numbers on its takers are not available, experts estimate it could be anywhere between 10-20% of the ₹6,000 crore liability insurance market.

Interestingly, in India, which has traditionally low insurance penetration ~1%, the emerging cyber insurance market is growing at 25-30%, the fastest growing among all types, said Gaurav Arora of ICICI Lombard.

According to Sai Krishna, CEO of cyber security firm, Hackrew, even though cyber insurance penetration is slowly becoming popular, the claims are significantly lower. “It has just become a checkbox phenomenon for most firms, while there are fundamental challenges at the compliance level,” he said.

Data Protection Bill

“With Data Protection Bill coming up, the penetration across the corporate space will increase significantly,” said Srinivas Kodali, an independent researcher who studies digitisation. However, he does not see the retail side picking up anytime soon. “The business model can be different where insurance companies have potential partners, including phone companies or apps, and may find takers among high-net-worth individuals,” he added.

On the retail side, however, the momentum is yet to take off. “While there are individual takers for this relatively new policy in Tier-1 cities, the numbers are not significant yet,” Ms. Saiwal suggested. Tier-2 and 3 cities are not seeing much growth, she added.

For corporate cyber insurance, premiums can range anywhere between 0.7-1.2% while for retail customers, the premiums can range between 0.1-0.2%. The retail market is currently largely unorganised with only a few players and in fewer geographies.

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