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Cyber insurance products, which were traditionally bought by e-commerce firms and financial institutions in India, are now finding favour among manufacturing entities.
An increasing shift towards use of IoT (Internet of Things) devices to improve efficiency and productivity of operations in the manufacturing sector is one of the key reasons for growing acceptance for such covers.
According to industry experts, while India has not seen any huge payout towards insurance claims arising out of data theft, rise in incidents of cyber security threats globally is driving India Inc to put in place checks and balances.
“Banking and IT have been big buyers of cyber insurance products in India so far; now even the manufacturing sector is coming in a big way,” Uttara Vaid, Founder of Uttara Vaid Advisory, told BusinessLine on the sidelines of an insurance seminar organised by the Confederation of Indian Industry here on Wednesday.
According to the information tracked by Indian Computer Emergency Response Team, cyber security incidents have increased from 44,679 in 2014 to 50,362 in 2016. Till June 2017, as many as 27,482 cyber security incidents were reported.
According to a report – ‘Redefining Insurance – The future ahead’ put out jointly by CII and Deloitte, cyber threats have evolved from virus attacks to sophisticated malware, and phishing, including spear phishing and advanced denial of service attacks.
“Businesses in India will continue to face increasingly sophisticated and destructive cyber threats in this evolving digital landscape,” the report said.
Growing demand The global cyber insurance market is pegged at $1.3-1.5 billion growing at a CAGR of 35 per cent, according to a Fitch Report.
Close to 150-200 companies in the country across vulnerable sectors have taken such cyber insurance products, with current gross premium written being merely around ₹200 crore.
According to Sanjay Datta, Chief – Underwriting and Claims, ICICI Lombard General Insurance, the segment offers good growth potential.
Cyber insurance was previously offered as a bundled product with other liability covers like ‘Errors and omission insurance’ for IT companies, ‘Computer Crime’ or ‘Commercial Crime and Banker’s Blanket Bond’ and so on. The demand for customised standalone offering in this segment is on the rise.
“Earlier, cyber insurance was a part of some cover; now it is developing a market of its own,” Datta said.
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