Rising Cyber Attacks Drive a 60% Increase in Cyber Insurance Premiums

Businesses in India are increasingly worried about the danger of cyberattacks, data breaches, and hacking as a result of the growing dependence on the internet across all industries. As a result, insurers have reviewed their premium pricing, which has resulted in a significant increase in the cost of cyber insurance. Despite the rise, the rates are still fairly high given the rapidly growing demand for and use of cyber insurance.

According to T.A. Ramalingam, Chief Technical Officer of Bajaj Allianz General Insurance, “Cyber insurance solutions are becoming more important as their requirement and usefulness become apparent. We have seen that insureds are spending more money to strengthen their cybersecurity posture, including risk transfer, staff training, and risk management, which also enables them to get a higher insurance rate based on their risk mitigation techniques.

Factors Affecting Premium Increases

The cost of cyber insurance has increased in India for a number of reasons. First, the necessity for coverage has become more urgent as a result of the rise in cyber hazards and assaults affecting different company sectors. Because of the increased severity of cyber losses and the higher claim amounts that resulted, new premium structures were required.

Additionally, the prevalence of ransomware and losses from cyber extortion has increased the financial strain on firms. The development of ransomware as a service (RAAS), which has increased incident frequency and intensity, has made it simpler for thieves to carry out assaults. The total cost of cyber insurance policies has also been influenced by the declining reinsurance capacity for cyber.

The necessity of data privacy as well as the escalating costs and penalties for data breaches are important additional drivers. Companies experience significant financial losses when regulatory frameworks tighten as a result of legal costs, system repairs, and data recovery operations.

Recognising Cyber Insurance Protection

A specialised product called cyber insurance protects companies against internet-based hazards and other IT-related concerns. Commonly, standard business general liability plans do not fully cover these risks or exclude them from coverage. Cyber insurance plans include a range of coverage choices, such as:

Protects against losses from things like data loss, extortion, theft, hacking, and denial-of-service assaults.

Indemnifies businesses for damages suffered by third parties due to mistakes and omissions, a failure to protect data, or defamation.

Cyber insurance plans sometimes include perks in addition to financial protection, including recurring security audits, post-incidence public relations assistance, investigation costs, and even criminal reward monies.

The Market For Cyber Insurance In The Future

The worldwide market for cyber insurance is expected to expand significantly. By 2024, it is anticipated to reach over Rs 1.59 lakh crore, signifying a growth rate of almost 25%, according to the Data Security Council of India (DSCI).

Businesses must understand the need of investing in strong cybersecurity measures and adequate cyber insurance coverage as cyber threats change and grow. By working with insurers and implementing efficient risk management procedures, businesses may reduce possible financial damages from cyber disasters.

According to Ramalingam, “In today’s digital world, cyber insurance acts as a crucial risk management instrument. Protecting against the continuously increasing cyber risks should be a priority for businesses in their entire risk management plan.

Businesses may protect their financial security and guarantee company continuity in the face of cyber hazards by being proactive.