Page 9 - Insurance Times October 2020

"Commercial lines of business-like prop- "This has led to the cost of premium sides customer enquiries gone up by
erty, engineering and fire have grown of cyber insurance covers going up by 50% since lockdown
because of price rise and overall in- 40% between March-September," said In the early phase, enquiries came from
crease in premiums. Even health pre- a spokesperson at the non-life insur- BFSI and IT/ITES companies who were
miums have seen good surge as people ance company. For example, under the the early adopters to cyber risk. As per
are now realising the importance of corporate cyber policy for a minimum recent trends, enquiries have been
having a health insurance due to the sum assured of Rs 5 crore, the cost of coming from hospitality, educational
ongoing pandemic." He also added premium has risen by Rs 4.5-Rs 4.8 institutes, manufacturing, including
that motor insurance had de-grown in lakh, as compared to Rs 3-Rs 4 lakh SMEs. Large-level companies who have
the past few months and new vehicle earlier. For a maximum coverage of Rs adapted the work-from-home model for
sales had been depressed. 50 crore, the cost of premium in- a longer term have opted for higher loss
The standalone health insurance com- creased to Rs 30 lakh as against Rs 20- limits, compared to midlevel clients.
panies saw gross premiums at Rs Rs 25 lakh earlier. However, insurers This is because the security of devices
7,810.97 crore in the first half of the say the cost of retail or individual cyber at work from home set up is unmatched
current fiscal year compared to Rs insurance policies have not changed to those offered in the office area," he
6,099.50 crore in the last financial much as marginal claims are reported. added. On claims settled, Datta said
year, registering 28.06% growth. Cur- Cyber Insurance policies offer protec- 10%-15% increase seen in settling loss
rently, health and motor insurances tion for both individual and corporate this year. "Majority of claims are re-
have market shares of around 31% and customers, with a sum assured rang- ported by corporate clients (the IT sec-
30%, respectively, in new business pre- ing from Rs 1 lakh to Rs 5 crore. The tor) and are examining the same." Najm
miums. Market participants said motor cover protects against the loss of sen- W Bilgrami, national head of financial
insurance numbers should look positive sitive personal and corporate informa- lines at Tata AIG General Insurance,
in the next two months due to the fes- tion caused by theft or altering of data, said forensic costs still form the largest
tive demand. virus or malware, denial of service, and piece of the cyber claims pie.
also reputational damage in terms of Ransomware, data theft, fraudulent
According Care Ratings, "In Septem- both the reputation of the business and
ber 2019, the premiums had increased that of the senior executives. It also fund transfer, phishing attacks form the
primarily due to higher crop insurance covers policyholders from lawsuits and majority of claims applied by the in-
premiums. In the current year, crop also losses arising out of virus attacks. sured.
insurance premiums till August 2020 Bajaj Allianz General Insurance which
have been higher, but anecdotal data ICICI Lombard General Insurance Com- offers Cyber protect standard digital
suggests that as the crop insurance pany saw the cost of premium for its business and data protection insurance
scheme has been made optional, corporate cyber covers increase by cover has seen a 20% increase in pre-
farmer enrolment has reduced. An- 15%-20% in FY21. Its head of claims, mium cost at the time of renewal. TA
other reason for the drop in farmer underwriting and reinsurance Sanjay Ramalingam, chief technical officer,
enrolment is reportedly the delay in Datta said, "Cyber Insurance is an ex- said, "This increase in cost varies be-
pay-outs." posure based insurance product, hence tween customers and is calculated on
the premium cost is highly dependent the value of claims made by them. We
on various risk attributes which involves
Cyber insurance premiums cyber security measures for that par- are also open to provide discounts to
new corporate clients who want to
rise 20% on higher claims ticular organisation. increase the coverage limit in the fu-

Premium on cyber insurance covers has If the growing trend of higher cyber- ture." Its cyber insurance business
risen by nearly 20% for corporates, as attacks continues, insurers and grew by 40% this year and booksize
insurers witness a surge in cyber- reinsurers offering cyber insurance will stands at Rs 35 crore. According to
attackswhich will result into more harden the rates." Speaking on the Indian Computer Emergency Response
claims. Future Generali India Insur- increasing penetration of cyber insur- Team (CERT-In) 6.9 lakh cyber security
ance (FGII) said the claims arising out ance policy, Datta said 50% growth incidents were reported till August,
of cyber attack has increased from seen in the number of policies under- 2020, which is a 43% jump from the
20% in March to 45% in August, 2020. written as compared to last year, be- previous year.
The Insurance Times, October 2020