Page 34 - Insurance Times Janaury 2021

financial cover, it will also give you the umbrella to keep ICICI Lombard General Insurance recently launched a retail
away from psychological stress which might arise otherwise cyber liability policy. According to ICICI Lombard General
due to hacking of sensitive date. "In Europe, they have a Insurance, hackers based in China attempted over 40,300
new cyber law which is called General Data Protection cyber attacks on India in the third week of June, mostly
Regulation, implemented in May 2018. As per the Data Covid-19 based scams. Attacks were aimed at causing issues
Security Act, they are mandated to report every cybercrime such as denial of service, hijacking of internet protocol and
case. We have an IT Act, but it is not stringent as GDPR." phishing. There has been pick-up in the corporate cyber
policy in the past five-six years, but individual policy is still
Cyber Insurance at a Nascent Stage: at a nascent stage in India. Corporates are facing challenges
on multiple fronts.
Cyber insurance is as dynamic as the companies it protects
and is consequently far from standardized. The cyber
Say for example, any social media company or a financial
insurance market has grown rapidly in recent years. Despite
this, low premium prices and high risks are combining to institution or a hospital has huge volume of personal data
stifle further growth, and leaving many firms underinsured and if fraudsters get hold of that data, it can be disastrous
against this growing threat. Even as the cyber security for those companies. Hackers can hack the data and leak in
public, which will mean loss of face for those companies. This
threat looms large in India, cyber insurance covers have not
is where Cyber Insurance can serve as a risk management
picked up in a big way. While the non-life insurance industry
received premiums of Rs 1.89 lakh crore in the last financial and mitigation strategy, having a corollary benefit of
year, the share of cyber insurance was a paltry Rs 200-220 improving the adoption of preventive measures (products,
services and best practices).
crore.
Typically, cyber covers are in the range of Rs 40 crore to Rs
The issue that needs to be looked at is email spoofing and
phishing attacks. To protect investors' against any cyber 200 crore depending on the sector, and premiums are in the
frauds or digital risks that could result in a financial or range of 1-4% of sum insured. An individual can buy cyber
reputational loss. According to the Internet Crime Report cover anywhere in the range of Rs 5 lakh to Rs 20 lakh. Cyber
for 2019, released by FBI's Internet Crime Complaint Centre, Insurance products are designed to mitigate risk exposure
by offsetting costs, after a cyber-attack/breach.
India ranks third among the top 20 countries that are victims
of cybercrimes. Unsurprisingly, cyber insurance emerged
onto the insurance scene recently as a result of the fact that Standard Cyber Liability Insurance Cover:
other traditional business insurance policies were simply not The General Liability policies do not cover cyber risks and
created to cover the types of risks most commonly cyber insurance policies currently available are highly
associated with cyber insurance. This is the Cyber Insurance customized for clients in a new and quickly growing market.
Ecosystem: Hence, it is felt that a basic standard product structure is
required to provide insurance cover for individuals and
establishments to manage their cyber risks. As a step
towards such a product, a Working Group has been
constituted by the regulator. After conceptualizing Standard
Health and Life insurance covers, the IRDAI is keen on
evolving a basic Standard Cyber Liability Insurance product.

Working Group has to explore possibility of developing
standard coverages, exclusions and optional extensions for
various categories. The Group has to study various statutory
provisions on information and cyber security; evaluate
critical issues involving legal aspects of transactions in cyber
space; and to examine various types of incidents involving
cyber security in recent past and possible insurance coverage
strategies for them. The working group examining the cyber
liability insurance covers available in the country and
abroad. Many cyber attacks are not publicly known as it is

34 The Insurance Times, January 2021