By navigating our site, you agree to allow us to use cookies, in accordance with our Privacy Policy.

Cyber Insurance – A Way for Risk Mitigation

Sanjeev Srinivasan
Sanjeev Srinivasan, CEO&MD Bharti AXA General Insurance

The recent spike in occurrence of cybercrime across the globe has made it obvious that it is no more a question of “whether” but a question of “when”. The average cost to the organization of these breaches is estimated to be close to 5 million USD. Multiple analyst reports place the average cost per breached record between USD 78 and USD 277. This cost is attributed to investigation and remediation activities, notifications to be sent to customers and other stakeholders, change in credit worthiness, reputation management, legal fees and settlements and any regulatory fines arising from the breach. Add to this the intangible loss to the brand value and the change in customer behavior in response to the breaches.

Organizations no more have the luxury of imagining that they will not be targeted by malicious hackers. Remember that the hacks need not just target the data an organization holds – the compromised systems can also be used to launch an attack on third parties it interacts with. In such a scenario, the organization may be held liable for the damage caused to the third parties. While a commitment to security is must, it is impossible to make any system 100% foolproof. As such, it has become inevitable for organizations across industries and sizes to develop a good cyber risk management approach.

A sound cyber risk management plan will include increased cyber resilience through response and recovery, contingency planning, and as a last resort mitigation and transfer of financial risk through cyber insurance. The cyber insurance market is still nascent, and even in the markets where take-up for commercial property and liability insurance approaches 100%, cyber insurance is purchased by anywhere between 20% to 35% of businesses based on the industry and size of the organization. The variation based on size and line of business indicates that the low adoption rate is because of a lack of awareness in the market.


To Read Full Article Please Fill Some Details

Jyoti Gazmer

A Mass Comm. graduate believes strongly in the power of words. A book lover who dreams to own a library some day. An introvert but will become your closest friend if you share mutual feelings about COFFEE. I prefer having more puppies over humans.

Related Articles