India is one of the world’s fastest growing economies. It should come as no surprise that a new Deloitte report asserts that the cyber insurance landscape in India is ready for substantial growth. That report, “Cyber Insurance in India,” sheds light on the sector’s burgeoning potential. As the nation accelerates its digital transformation, industries deeply ingrained in digitization, including IT, pharmaceuticals, and manufacturing, as well as those intertwined with broader economic sectors such as supply chain, retail, critical industries, and finance, have emerged as prime targets for cybercriminals. These sectors have embraced cyber insurance as a vital shield against emerging threats.
According to the report, the current Indian cyber insurance market is estimated at a value ranging between US$ 50–60 million. Remarkably, it has maintained a consistent compound annual growth rate (CAGR) of 27–30 percent over the past three years. Experts anticipate this upward trajectory to persist for the next 3–5 years. This growth propelled by heightened awareness of the critical need for cyber insurance.
“Strategic Investment”
The report’s findings were substantiated by a survey of Chief Information Security Officers (CISOs), revealing that a substantial 70 percent of respondents expressed a readiness to increase spending on fortifying their digital infrastructure over the coming three years. Particularly, mid-sized firms were enthusiastic about beefing up their cyber defenses. In contrast, some major consumer-oriented companies, custodians of extensive consumer databases, exercised caution in expanding their digital infrastructure budgets but displayed a keen interest in augmenting their insurance coverage.
“It is vital to recognize that cyber insurance is not an expense but a strategic investment.”
Debashish Banerjee, Deloitte India.
Notably, around 60 percent of respondents aimed to boost their insurance coverage without significant investments in enhancing digital security infrastructure.
The survey anticipates that the cyber insurance market will experience moderate growth in the short term but expects it to undergo exponential acceleration in the near future. In India, the trajectory of the cyber insurance market hinges on three key factors. The pace of digital maturity among businesses and government initiatives to digitize and enforce robust cyber laws. Finally, the entry of non-traditional players like tech giants and multinational corporations into the cyber insurance domain, intensifying competition.
Debashish Banerjee, Partner and Insurance Sector Leader at Deloitte India, stressed, “It is vital to recognize that cyber insurance is not an expense but a strategic investment. In the era of rapid digitization, businesses must view comprehensive cyber insurance coverage as indispensable.”
Anand Venkatraman, Partner, Risk Advisory at Deloitte India, emphasized the expected growth in cyber insurance, envisioning it becoming commonplace for businesses of all sizes in the coming decade. He underscored the necessity of tailored products, technological advancements, and government support in facilitating this transformation.
Three Pivotal Aspects
The successful growth of the cyber insurance industry, Deloitte suggests, depends on three pivotal aspects. First, buyers must discern their specific cyber insurance needs through thorough risk assessments. Second, sellers must simplify policies and educate clients on diverse coverage types. Third? Government’s role is crucial in establishing an effective data protection framework.
The report also highlighted key survey takeaways. These include the current state of cyber insurance coverage among respondents. And the perceived value for money, and the mismatch between premiums paid and coverage received. Additionally, it underlined the pressing need for prompt implementation of the Digital Personal Data Protection (DPDP) Act 2023. Which aims to address escalating cyber risks and data breaches while ensuring regulatory compliance.
Source: Cyber insurance gains momentum in India; set to witness exponential growth: Deloitte’s report
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