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There is a great market opportunity for new-age insurance products like cyber insurance, especially in tier- 2 & 3 cities, according to an online survey by Policybazaar.
The findings showed around 23% of respondents had a cyber insurance policy in place. This represents a significant proportion of cybersecurity coverage in a country like India where the penetration of fundamental products like life and health insurance is still low.
Policybazaar conducted the survey to closely analyse consumer awareness levels and uptake of emerging protection products in India to observe the National Insurance Awareness Day 2022. The brand surveyed over 4500 of its customers and app/website visitors regarding relatively lesser-known products including cyber insurance, mental health insurance, home insurance and pet insurance.
The overall findings of the survey depicted a huge scope for awareness and purchase consideration for these products, with cyber insurance being an exception.
Another remarkable trend observed here was that nearly 48% of respondents in tier 2 & 3 cities had bought or showed the willingness to buy insurance, as opposed to 36% in tier-1 cities. The results clearly draw a parallel between growing internet consumption in smaller cities of India and starkly similar awareness levels to safeguard that consumption.
Though still in nascent stages, cyber insurance seems to be the next big opportunity for the insurance industry, as per the survey findings. At 31% and 29%, the highest number of respondents from tier-2 and 3 cities respectively indicated the propensity to buy cyber insurance as opposed to 16% in tier-1 cities. However, out of those who had actually purchased a policy, 20% of respondents belonged to tier-1 cities, while 17% belonged to tier-2 & 3 cities. The figures represent a growing level of awareness towards effectively combatting intangible threats to crucial digital assets across India.
Besides, the potential opportunity in smaller cities, another interesting trend that emerged was the inclination toward buying family cyber protection plans. While the highest number of 45% insured customers purchased family plans, whereas 35% purchased individual and 20% were covered under corporate plans. Not only this, even among the non-purchasers, 53% showed an interest in buying family plans, which is the highest among all. This implies an apparent preference for overall comprehensive protection not just for individual cybersecurity, but also that of the entire family.
Nonetheless, it cannot be denied that there’s still a scope of coverage here. Nearly 20% of overall respondents had suffered a financial loss due to cybercrime and out of those, only 24% ended up buying the policy and 39% neither purchased nor considered buying one. Financial loss due to unauthorised transactions emerged to be the threat that most respondents (57%) wanted to cover through cyber insurance.
