Digital threat drives cyber insurance demand

Aspurt in cyberattacks and an increased awareness about such crimes have contributed to a rise in demand for cyber insurance policies.

The uptick in such incidents has also led to a spike in claims for insurance companies, leading to a strengthening of underwriting parameters.

According to industry estimates, the number of cyber insurance policies sold in 2023 so far are 35-40 percent higher than 2022.

Experts attribute a heightened awareness about the risks for a jump in sales of insurance policies. "We see the increase in cyber-related incidents and awareness about them as reasons behind a higher demand for cyber insurance," said Gaurav Arora, chief of underwriting & claims property & casualty, ICICI Lombard General Insurance.

According to government data, there were 1,391,457 cybersecurity incidents in 2022, and 1,402,809 in 2021. Indian corporate world was not adequately prepared for it. After the pandemic, companies started making significant investments in upgrading their cyber security posture.

However, incidents of privacy breaches, business interruptions, and ransomware continued. There were instances of payouts across businesses, which led to an increase in cyber insurance-related claims.