News eDaily17 May 2017

India:Insurers await likely WannaCry-related claims

17 May 2017

Insurance companies are waiting for assessments from banks for any potential claims for losses caused by the malware, WannaCry.

However, experts say that insurers may end up paying for restoration and backup of computers affected by the ransomware rather than the ransom itself, thanks to high deductibles of US$100,000 to $500,000.

The amount of the ransom asked for by the WannaCry perpetrators is small, so companies are willing to pay this amount and claim cost of restoration and post-breach forensic, reported The Economic Times. WannaCry started hitting computers last Friday, demanding $300 in bitcoin to unlock an infected file or a computer.

In India, less than 200-300 cyber insurance policies have been sold by the industry as a whole, reported Moneycontrol. Among those which have taken out a cover, the most number of companies has been from the IT or FinTech space. In addition, not all general insurers offer cyber liability insurance.

One estimate is that the size of cyber crime covers sold in India hovers around INR150 million (US$2.34 million) and the premium ranges from INR1.5 million to INR10 million based on the size of the cover and risks included.

Mr Sanjay Datta, Chief of Underwriting, Claims and Reinsurance at ICICI Lombard General Insurance, said that while India's exposure has been lower than that of the rest of the world so far, there could be a spillover and it is a serious threat.

"The coverage of cyber liability is not yet widespread and whoever has taken it are primarily financial institutions and that is where the risk is. Other institutions like hospitals have not taken it. After this incident, we hope that sale of this product should pick up," he added.

Mr Sasikumar Adidamu, Chief Technical Officer - Non-Motor Insurance at Bajaj Allianz General Insurance, said: "There has been a sharp jump in enquiries. However, the same percentage has not translated into purchases. In the general insurance market, companies have currently sold close to 200 pure cyber-crime policies, prior to which it was sold as an extension to other liability products such as professional indemnity and commercial crime."


 

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