Global insurance broking and risk management firm Marsh have seen an uptick in interest for cyber insurance covers from corporate houses amid rising costs of data breaches in the country.
A study by IBM showed that the average cost of a data breach in India in 2022 was $2.32 million, up from $2.21 million in 2021. Globally, the average cost of a data breach has increased to $4.35 million in 2022 from $4.24 million.
India's own nodal agency for responding to computer security incidents — Cert In — in a report last month said there has been a 53 per cent increase in ransomware incidents in 2022 with the IT&ITeS industry majorly impacted followed by finance and manufacturing. Ransomware players have also targeted critical infrastructure organisations and disrupted critical services in order to extract ransom payments.
This has prompted more corporates and institutions to go for cyber insurance coverage.
"What used to be a once-in-a-week purchase, has now become almost everyday kind of a thing. What used to be a $10-20 million kind of a play has become a $100 million play, pretty regularly," said Anup Dhingra, managing director, Finpro and private equity, mergers and acquisitions, Marsh India.
While the early adopters of cyber insurance policies were primarily banks, financial institutions, and technology firms, now hospitals, universities and even hotels and restaurants are also exploring cyber insurance options amid the rising complexity of breaches and associated costs.
"The usual approach for CISOs (chief information security officers) used to be putting more money into creating security and defence rather than buying insurance," Dhingra said.
"Today this is very different and the boards are taking a middle path between risk avoidance and mitigation which is the capex part as well as the risk transfer by paying the finite cost of insurance. That is a huge change we have seen," he added.