Page 26 - RMAI Bulletin July - September 2021

RMAI BULLETIN JULY TO SEPTEMBER 2021

Cyber security insurance safeguards online users from ICICI Lombard General Insurance recently launched a
damage and loss which might arise due to retail cyber liability policy. According to ICICI Lombard
unauthorized disclosure of personal and financial data. General Insurance, hackers based in China attempted
Apart from financial cover, it will also give you the over 40,300 cyber attacks on India in the third week
umbrella to keep away from psychological stress which of June, mostly Covid-19 based scams. Attacks were
might arise otherwise due to hacking of sensitive date. aimed at causing issues such as denial of service,
"In Europe, they have a new cyber law which is called hijacking of internet protocol and phishing. There has
General Data Protection Regulation, implemented in been pick-up in the corporate cyber policy in the past
May 2018. As per the Data Security Act, they are five-six years, but individual policy is still at a nascent
mandated to report every cybercrime case. We have stage in India. Corporates are facing challenges on
an IT Act, but it is not stringent as GDPR." multiple fronts.

Cyber Insurance at a Nascent Stage: Say for example, any social media company or a
financial institution or a hospital has huge volume of
Cyber insurance is as dynamic as the companies it
protects and is consequently far from standardized. personal data and if fraudsters get hold of that data,
The cyber insurance market has grown rapidly in it can be disastrous for those companies. Hackers can
recent years. Despite this, low premium prices and hack the data and leak in public, which will mean loss
high risks are combining to stifle further growth, and of face for those companies. This is where Cyber
leaving many firms underinsured against this growing Insurance can serve as a risk management and
threat. Even as the cyber security threat looms large mitigation strategy, having a corollary benefit of
in India, cyber insurance covers have not picked up in improving the adoption of preventive measures
a big way. While the non-life insurance industry (products, services and best practices).
received premiums of Rs 1.89 lakh crore in the last
financial year, the share of cyber insurance was a paltry Typically, cyber covers are in the range of Rs 40 crore
Rs 200-220 crore. to Rs 200 crore depending on the sector, and
premiums are in the range of 1-4% of sum insured. An
The issue that needs to be looked at is email spoofing individual can buy cyber cover anywhere in the range
and phishing attacks. To protect investors' against any of Rs 5 lakh to Rs 20 lakh. Cyber Insurance products
cyber frauds or digital risks that could result in a are designed to mitigate risk exposure by offsetting
financial or reputational loss. According to the Internet costs, after a cyber-attack/breach.
Crime Report for 2019, released by FBI's Internet
Crime Complaint Centre, India ranks third among the Standard Cyber Liability Insurance
top 20 countries that are victims of cybercrimes.
Unsurprisingly, cyber insurance emerged onto the Cover:
insurance scene recently as a result of the fact that The General Liability policies do not cover cyber risks
other traditional business insurance policies were and cyber insurance policies currently available are
simply not created to cover the types of risks most highly customized for clients in a new and quickly
commonly associated with cyber insurance. This is the growing market. Hence, it is felt that a basic standard
Cyber Insurance Ecosystem: 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;

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