'Cyber insurance' category has seen a 40 per cent year-on-year growth in 2018 in India as increasing cyber security threats and challenges are prompting organisations to opt for such solutions to offset financial liabilities in case of a breach, the Data Security Council of India (DSCI) said in a report.
Cyber insurance market globally is expected to grow at a CAGR of 27 per cent from USD 4.2 billion (about Rs 29,400 crore) in 2017 to USD 22.8 billion (about 1.59 lakh crore) in 2024, the report said.
India, which is still in its nascent stage of adoption, saw a 40 per cent year-on-year growth from 2017 to 2018, with about 350 cyber insurance policies being sold so far, it added.
Cyber insurance is designed to cover the fees, expenses and legal costs associated with cyber breaches that occur after an organisation has been hacked or from theft or loss of client/employee information.
The report titled 'Cyber Insurance in India- Mitigating Risks amid Changing Regulations and Uncertainties' said the insured amounts ranges from USD 1 million (about Rs 7 crore) to USD 200 million (about Rs 1,400 crore).
For USD 1 million coverage, premium amount ranges from USD 6,500-8,000 (about Rs 4.5-5.6 lakh).
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The report said India's yearly 'cyber premium' is in the range of Rs 80-100 crore (USD 11-14 million). While IT/ITes and banking and financial services are early adopters, there is demand coming from manufacturing, pharma, retail, hospitality, R&D and IP-based organisations.
"With increasing cyber security threats and challenges the country currently is facing, it is important that every organisation takes a 360-degree approach to their preparedness including cyber risk management.
"Financial services sector continues to be a prime target for cyber and data breaches and businesses could face enhanced cyber liabilities," National Cyber Security Coordinator Rajesh Pant said.
While the sector has to step up its security preparedness, cyber insurance can help offset financial liabilities when a breach occurs, he added.
"Insurance industry must come up with comprehensive risk coverage policies tailor made for the risk assessment of a sector and the business," he said.
Rama Vedashree, CEO at DSCI, said cyber insurance is proving to be a key tool in risk management and cost-offsetting arsenal of an enterprise and at the same time, scaling up the prevention and protection measures.
"The report offers market and technical insights on the trends in cyber insurance and aims to increase awareness and gives a checklist to help evaluate a cyber insurance policy," she added.