Banks look for insurance as cyber threats increase
State Bank of India, which fell victim to cyber frauds late last year, is now considering insurance to protect its over 30 crore customers
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Mumbai: With instances of cyber threats increasing, the banks, which are increasingly going digital prodded by government and regulators following note-ban, are looking for cyber insurance—a fledgling industry vertical for general insurers but having large growth potential.
The country reportedly lost a whopping $4 billion in fiscal 2016 to cyber crimes, while globally, the economic loss due to cyber crimes stood at $455 billion in 2016. According to insurance industry reports, cyber crimes are growing at 40-50% annually globally. Similarly, global cyber risk insurance premium stood at $3.5 billion in 2016, which was only $2.5 billion in 2015, amply indicating growing incidents of cyber crimes across the world.
Country’s largest lender State Bank of India (SBI), which fell victim to cyber frauds late last year, is now considering insurance to protect its over 30 crore customers. “As we are now planning to take cyber covers for our customers, we have already asked one of the companies which are on the bank’s panel of insurance advisers to prepare a report for us in this direction,” SBI managing director Rajnish Kumar said.
Similarly, Bank of Baroda (BoB), which had seen about 1 lakh of its debit cards being compromised in the recent episode, is also keen to go for such insurance covers in future. “We are here to ensure protection of our customers and hence we will definitely go for cyber insurance cover as and when it was required for the bank,” BoB managing director P S Jayakumar said. While private sector lender Axis Bank is reported to have taken cyber insurance cover from HDFC Ergo, as many as 20 state-owned lenders are seriously in talks with insurers to get cyber insurance cover.
The city-based private lender did not respond to text messages seeking for confirmation. General insurers also see a rise in demand for cyber risk insurance. “We are in talks with quite a few banks to provide cyber insurance cover to them,” New India Assurance chairman G Srinivasan said without divulging any details. “Cyber threat is on the rise in recent times for the banks and therefore they must go for cyber insurance cover,” Srinivasan said.
Bajaj Allianz General Insurance chief technical officer for non-motor business, Sasikumar Adidamu, said cyber insurance has seen close to 20% rise at Bajaj Allianz in the current fiscal. He also said that in-line with rising incidents of cyber threats, the industry has seen a 10-15% uptake of cyber liability covers.