![Evolving Dynamics of Cyber security and Insurance](https://img-cdn.thepublive.com/fit-in/1280x960/filters:format(webp)/pcq/media/media_files/MF5ePt38iDi0rrXwlVxT.png)
In the constantly evolving landscape of Cyber security, understanding the threats and the role of insurance is crucial. Najm Bilgrami, the National Head of Financial Lines at Tata AIG General Insurance, offers a comprehensive perspective on these challenges and the emerging solutions during a detailed conversation with Ashok Pandey.
Cyber Threats: A Dynamic Risk Landscape
Najm Bilgrami begins by emphasizing the dynamic nature of cyber risks, which have significantly evolved over the past decade. He notes that cyber-attacks no longer target specific industries or sectors; today, they can strike anywhere, from healthcare to critical infrastructure, making predictability nearly impossible. For instance, major pharmaceutical companies in India, such as Sun Pharma and DRL, have experienced breaches, highlighting the severity and frequency of these incidents.
The Role and Response of AI in Cyber security
Artificial intelligence (AI) plays a dual role in the realm of Cyber security. On one hand, AI aids in detecting fraud and improving underwriting processes within insurance companies. On the other hand, cybercriminals are leveraging AI to orchestrate more sophisticated attacks, such as highly credible phishing attempts and rapid exploitation of software vulnerabilities.
Financial Impact of Cybercrime on Indian Businesses
Discussing the financial repercussions, Bilgrami refers to a 2023 IBM report which pegs the average cost of cybercrime for Indian businesses at approximately ₹19.7 crore (around $2.4 million), indicating a sharp increase from previous years. This trend suggests a global rise in cybercrime costs, anticipated to escalate from $9.2 trillion in 2024 to $13.8 trillion by 2028.
Industries at Risk: Financial Services and Healthcare
Financial institutions and healthcare are among the most targeted sectors due to the valuable data they handle. However, while banks and IT companies have matured in their Cyber security approaches, other sectors lag behind, often underestimating the severity of the threat. The healthcare industry, for instance, remains a lucrative target for hackers because of the high value of medical data on the dark web.
Cyber Insurance: A Necessary Shield
Bilgrami extensively covers the role of cyber insurance, which Tata AIG introduced to the Indian market in 2014. Cyber insurance not only covers direct damages and legal liabilities arising from data breaches but also supports businesses through IT forensic investigations and business interruption losses. Importantly, insurers are now focusing on pre-emptive measures, including risk assessments and employee training programs to mitigate potential threats.
As cyber threats continue to evolve, the need for robust protective measures and informed insurance solutions becomes increasingly critical. Companies must adopt comprehensive Cyber security strategies and consider cyber insurance not just as a safety net but as an integral component of their risk management framework. This proactive approach is essential for safeguarding against the ever-growing spectrum of cyber threats.