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The Digital Revolution and the Demand for Cyber Insurance

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By Tejas Jain, Founder at Bimakavach

If you ask anyone on the street, you’ll find that the phrase ‘Digital India’ has resonance and recall almost as much as anything you could say about India. This is telling. It’s India’s impressive march towards digital dominance that has made the world envious and look up and take notice.

The country’s Internet penetration reached 48% in 2022 from just 4% in 2007. This might seem low at first glance, but it’s almost half of the 1.37 billion population that had access to the internet last year. This is closer to a miracle than a fluke. At the same time, India leads the world in digital transactions, and soon enough, Indian organizations are expected to spend more than $85 billion by 2026 on digital transformation.

This digital transformation cuts across industries, verticals, and even organization sizes.

Be it the small businesses accepting payments through card machines at their distribution points or the large energy major implementing a fully automated rig monitoring solution – the digital revolution has brought prosperity and efficiency at a disproportional scale.

The ultimate winners are consumers of this global digital economy who get to experience the best of products and services at the press of a button.

Attackers at the gate

But there’s a chink in this digital armor. The deepening of digitization increases incentives for bad actors, such as cyber criminals, to attack individuals, governments, and organizations at every instance. And India – especially on the business side – is flying blind in the face of relentless enemy fire from the skies.

Let’s look at some data. In 2021, more than 11 lakh cyberattack incidents were reported in India. These are the incidents that got reported to Indian Computer Emergency Response Team (CERT-In) – and the actual number could be much higher if one counts the number of incidents that went unreported. At the same time, more than 76% of organizations were impacted by at least one cyberattack in the year – and the total cost of damages was pegged at upwards of Rs 63 crore.

This is the sobering landscape of Indian businesses’ cybersecurity preparedness. The problem with cyberattacks is that they can be shape-shifting in nature and can come from various sources – almost as many as the devices in the organization – opening up millions of points of vulnerability for just one large enterprise.

This is just the tip of the iceberg. Cybersecurity attacks are becoming more common for organizations around the world and India is likely to follow suit. With the growing number of digital-first companies including startups that work in retailtech, healthtech, fintech, agritech and the likes – hordes of data and individuals will find themselves in harm’s way if organizations don’t proactively act to protect their digital walled gardens.

Protection is the cure

The problem with cyberattacks is this – it’s extremely unlikely that any individual or an organization can bring the potential of an attack down to zero. At the same time, with the advancements in technology – the attacks and risks are going to only get more complex and sophisticated.

Hence, even the best firewalls and cybersecurity practices might prove toothless in the face of a highly-coordinated attack. The prognosis gets worse when one looks at the current state of preparedness. According to ISACA’s State of Cybersecurity Report 2022 – 40% of Indian organizations have understaffed cybersecurity teams while another 60% have pending openings for roles in this domain.

The solution – and perhaps the only effective one – is risk protection and mitigation. While tougher cybersecurity practices will help safeguard organizations, it’s imperative they choose cybersecurity insurance to keep themselves protected in case the event does occur – and it’s highly likely it will, at some point or the other.

The shield of cybersecurity insurance

This is the key reason behind the meteoric rise in popularity of cyber security insurance in India in recent years. This type of insurance helps protect a business from liabilities arising after a cyber attack. Most cyber security insurances cover costs including attack response, legal fee, client management etc. and thereby, help a business tide over the incident with limited damage to their operations.

Cyber insurance policies have proven effective in helping businesses pay off liabilities arising from stolen customer data, compromised passwords, breached bank accounts, frozen databases and a lot more.

A comprehensive and dynamic cyber insurance protection becomes necessary for almost every business when one considers the severe reputational damage, regulatory fines, legal charges and customer obligations that arise from a cyber attack incident.

The best part about cyber insurance is that many insurers also assist businesses in managing the attack – including response, negotiating ransom, legal proceedings and further protection to prevent a repeat of such attacks in the future.

While the world digitizes and businesses focus on making the best use of technology to bolster customer experiences as well as their bottom-lines, it’s necessary for all modern enterprises to sincerely consider getting a comprehensive cyber security audit and insurance framework in place. This will ensure that the blood, sweat and tears of an entire organization do not go to waste in the event of a malicious attack by a bad actor. As always, prevention remains the best cure.

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