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As individuals who grew up at different stages of India’s digital adoption, most of us have never quite been taught to think of cyber fraud as an immediate, personal threat. But in many cases, the digital world has progressed faster than our education to inhabit it safely. The ground reality is that anyone with an internet connection today runs that risk. Over 84 per cent of internet users in the country engage in online financial transactions. Anything we do online, whether it’s shopping, banking, or just innocently logging into our social media accounts, carries the potential for a breach.
Typically, phishing attacks, ransomware, and identity theft used to be the cause of worry for large corporations. But now these have made unwarranted inroads into households and can steal one’s peace of mind – in addition to sensitive data and money. One of the easiest, smartest solutions to this is investing in appropriate cyber insurance — as individuals because the next scam could be just a click away.
Expanding risk horizon
According to CERT-In, over 1.4 million cybersecurity incidents were reported in India in 2022 alone, and the number continues to grow. What is even scarier is that these figures show only a fraction of the problem – many cases even go unreported as individuals either lack awareness or are simply hesitant of getting involved in its legalities.The methods cyber criminals employ have been getting alarmingly craftier. Even the most cautious individuals can fall prey to these as the scamsters very slyly use social engineering, deepfake technology, and AI-assisted fraud making their narrative rather convincing.
Just last month, a colleague lost hard-earned money while trying to book a simple doctor’s appointment. She made the mistake of clicking on a text that appeared to be from the hospital, but was from scammers. In another incident a digitally ill equipped septagenurian lost lakhs as scammers called him saying his daughter and son-in-law had met with an accident during their international trip.
At this point, the damage is not merely financial. There’s violation of privacy combined with the helplessness of losing hard-earned money. The emotional toll of a cyberattack like these on a family, can be profound.
Why individual cyber insurance helps
Retail cyber insurance can be very helpful where preventive measures often fall short. While intelligent, strong passwords, two-factor authentication, and cybersecurity software provide a first line of defense, they cannot guarantee immunity from the sophisticated methods employed by today’s fraudsters.
Cyber insurance offers a safety net that combines financial reimbursement with expert support in times of crisis. These policies are intuitively designed to help policyholders bounce back from the material as well as reputational damage caused by such attacks.
The relevance of retail cyber insurance lies in its accessibility. These policies can be tailored to individual needs and are painstakingly designed to be straightforward and affordable. The idea is to make these policies palatable for every generation in a family ranging from young professionals to retirees who wouldn’t have the time or the tools to navigate through insurance jargon.
Bridging the awareness gap
Even as cyber threats to individuals have taken a scary course, the uptake of cyber insurance in India is quite low. One of the reasons for this is the ignorance of people about the product. Even now, most people consider cyber risks to be unrealistic threats, and do not appreciate how easily they can become victims of these crimes.
In order for cyber insurance to be effective, for the benefit of the society, the industry must emphasise on sensitisation of the clients. This goes well beyond promotions; it calls for genuine efforts to have people engaged in debates on how to stay safe online. Marketing campaigns, collaboration with fintech companies, and incorporation into digital skills education can contribute to building a society that appreciates the need for cyber insurance and other prevention techniques.
Another factor that is equally important is trust. For any insurance product to act as a cushion, people need to buy into the fact that its delivery will be effective. Making the claims process more straightforward and developing customer-centric approaches will assist in achieving this trust.
A necessary evolution
Cyber insurance for individuals is not only an answer to the rise of cyber security threats - it signifies a change in the way we think about security in the contemporary world. Much like in the past, when people started appreciating the significance of health insurance due to technological growth, presently, cyber insurance is coming into the picture where almost every aspect of life is increasingly technology dependent.
However, it should not be limited to just recovery of losses from cyberattacks. As a principle, cyber insurance is about reassurance - that some of the risks associated with the modern world can be mitigated. It’s a powerful tool that allows people to feel that they are not helpless in an often-chaotic world.
(The author is Head, Cyber Insurance, Policybazaar.com)