What Does the Future of Cyber Insurance Entail?
Today, the need for the internet is greater than ever. Giant corporations and small businesses alike cannot function without the internet. For individuals, the convenience facilitated by the internet, be it online shopping or digital banking, has become a basic necessity. However, criminals, too, are leveraging the power of the internet to commit internet–based crimes. To cover financial losses resulting from cybercrimes, businesses need to invest in an excellent cyber insurance plan. In this article, we have highlighted the role and future of cyber insurance and what it means for businesses.What is cyber insurance?
Cyber insurance is a type of insurance plan meant to protect individuals and businesses susceptible to internet–based crimes like cyber extortion, data breach, cyberbullying, phishing, etc. The insurance provider promises to pay an amount up to a specific sum insured as compensation for losses or expenses incurred by entities and individuals who fall prey to cybercrimes.
The compensation includes money paid as ransom, money lost to online shopping scams, legal costs involved in the prosecution of criminal cases, experts’ fees for data restoration, and treatment costs for psychological harm induced by the cybercrimes.Future of cyber insurance
Most companies today want an online presence and rely on the internet to run their operations. With increased internet usage comes an increased cybersecurity threat. To combat this threat, the Ministry of Electronics and Information Technology passed the Personal Data Protection Bill in 2019. The ministry mandated that all companies dealing with customers’ personal and financial data must follow the clauses in the bill while conducting business.
Moreover, the finance ministry, in association with the IRDAI, keeps updating the clauses to protect sensitive consumer financial data to ensure there are no loopholes that cybercriminals can exploit. This has led to the rising popularity of cyber insurance in India. Per a study published in the Data Security Council of India (DSCI), the demand for cyber coverage will continue to rise by 26.3% CAGR between 2020 and 2030. Another study states that the cyber insurance market is expected to grow from 8 billion USD in 2020 to 20 billion USD in 2025.
Industry experts believe cyber insurance’s future looms on whether companies will ask employees to return to the office, continue offering work from home facilities or adopt a hybrid model. Besides IT companies, banks, hospitality, education, etc., sectors have large databases with sensitive consumer information. Hence, businesses in these sectors may consider making cyber insurance a part of their cybersecurity risk management programme.
That said, the cyber insurance industry has its set of challenges. The internet keeps evolving, and so do cybercrime tactics. Insurance providers must therefore consider factors like the extent of coverage, virtual private networks (VPNs), impact on investments, etc. while drafting cyber insurance policy wordings.Invest in a cyber insurance policy
With the government taking measures to protect cyber information, it is safe to say that the future of cyber insurance looks promising. Cybercriminals will keep finding new ways of breaching systems. Therefore, cyber insurance providers must keep adapting. Cyber insurance provides security during cybersecurity attacks making it a must–have in today’s internet–reliant age.Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.