Understanding Cyber Risks: A Comprehensive Approach with Cyber Insurance

In today’s rapidly evolving digital landscape, the topic of cybersecurity is more critical than ever. I had the privilege of attending a detailed session on Cyber Risks and Cyber Insurance, organized by my Eagles Group in the ASCENT Foundation. A special thank you to Subbiah (Subbu) Rajagopal from Chella Software for organizing this event so seamlessly. Mahesh Chainani , Whole Time Director ?and Vernica Walia , Senior Vice President of Howden Insurance Brokers India Pvt Ltd, guided us through the evolving threats to businesses and individuals alike. They shed light on the importance of proactive strategies to mitigate the impact of cyber incidents.

The Growing Threat of Cyber Attacks

As businesses increasingly rely on IT infrastructure and data, the risks associated with cyber attacks grow exponentially. From financial theft and network breaches to privacy violations and reputational damage, organizations face a wide range of threats. The session highlighted some startling statistics:

• India witnessed over 2,138 cyber attacks weekly per organization in 2023, a 15% increase from the previous year.
• State-sponsored cyber attacks against India rose by 278% between 2021 and 2023.
• The average cost of a data breach in India touched INR 17.9 crores in 2023.

These figures make it clear that cyber incidents are not just increasing in frequency but also in severity, posing a real threat to businesses of all sizes, especially startups and SMEs, which saw a 508% rise in targeted attacks.

Addressing Cyber Risks: Prevention and Insurance

The session emphasized a two-pronged approach to addressing cyber risks: prevention and insurance. Preventive measures include securing networks, implementing multi-factor authentication, and ensuring regular cybersecurity audits. However, cyber insurance is becoming an essential safety net for when preventive measures fall short.

Cyber Insurance provides coverage for both first-party losses (such as data recovery, business interruption, and cyber extortion) and third-party liabilities (including privacy violations and regulatory fines). One key takeaway from the session was the importance of ensuring that your insurance policy is aligned with your cyber incident response plan.

Real-World Cyber Incidents

The session brought to life the relevance of cyber insurance through real-world scenarios:

• A ransomware attack where a lack of multi-factor authentication allowed an attacker to encrypt half of the company’s servers and steal critical data.
• A data breach at a financial institution, where compromised VPN access to vendors led to the theft of sensitive information.
• Phishing attacks resulting in denial-of-service disruptions across organizations.

These incidents underscore the need for robust cyber insurance policies that not only cover financial losses but also provide support for crisis management, legal defense, and recovery.

Cyber Insurance: More Than Just Coverage

One of the key insights shared by the speakers was that a good cyber insurance policy is not just about coverage but also about the value-added services that come with it. From forensic investigations and PR support to ransomware specialists and 24/7 crisis management teams, cyber insurance helps organizations manage and recover from incidents efficiently.

As cyber threats continue to evolve, it is imperative for businesses to stay ahead by investing in cybersecurity and cyber insurance. The right coverage can safeguard not just against financial loss but also protect an organization’s brand, reputation, and future growth.

Thank you, Vernica Walia and Mahesh Chainani , for an insightful session on a topic that is so vital in today's business environment. As businesses grow increasingly digital, understanding and managing cyber risks becomes essential to long-term success.

A special mention to the fellow attendees from the Eagles Group: Ajay Bhagwat ( Renu Electronics Pvt. Ltd. ) , Khushal Gala (Channel Packaging), Siddhi Shah ( PrintStop India ), Amit Goenka (Nuhome Fabrics), Yashesh Mukhi ( Chupps ), Samvar Mavani ( Mosil Lubricants Private Limited ) and Arun Kedia ( VAV Life Sciences | VAV Lipids ) who made the event even more engaging.