BFSI and Tech Lead India’s Cyber Insurance Surge Amid Growing Attacks
Cyber insurance adoption in India is surging, driven by rising cyberattacks, with BFSI and tech sectors holding a 70% market share. Nearly 100% policy renewals and increased first-time buyers highlight its growing role in ensuring business continuity and regulatory compliance. In India, cyber insurance is expanding at an unprecedented rate, with 100% of policies being renewed as companies realize how often cyberattacks are becoming. With a combined 70% market share, the BFSI (35–40%) and technology (30%) sectors are driving uptake, per a survey by Policy Bazaar for Business. The survey also shows that business interruptions caused by data breaches account for 45% of all cyber insurance claims, underscoring the critical role that cyber coverage plays in preserving business continuity. According to the report, the largest penetration of cyber insurance is found in mid-to-large firms with annual sales of at least ₹10 crore, suggesting a better awareness of regulatory requirements and cyber hazards. The following is the adoption breakdown by industry: BFSI (35-40%) – Financial institutions are the biggest buyers of cyber insurance due to increased financial fraud, regulatory scrutiny, and customer data protection requirements. Technology & IT (30%) – IT and internet companies are giving risk mitigation through insurance top priority because of their data-heavy operations and high vulnerability to cyberattacks. Start-ups (25%) – Adoption among rapidly expanding firms is being driven by venture capital investors and contractual responsibilities. Healthcare (5%) – More and more hospitals and healthcare organizations are protecting themselves from ransomware and data intrusions. Logistics (5%) – Logistics companies are investing in coverage as a result of the increased cyber dangers brought about by the growth of digital supply chains. According to the survey, a notable change has also occurred, with 30–35% of companies acquiring cyber insurance for the first time. This implies that individuals are becoming increasingly conscious of the operational and financial risks associated with cyberattacks, especially for start-ups and mid-sized enterprises. More and more businesses are adopting a proactive strategy, acquiring coverage before an attack, in place of a reactive one. What’s driving cyber insurance claims? The survey also sheds light on the reasons why companies are submitting cyber insurance claims, with the biggest percentage (45%) citing business disruptions brought on by data breaches. Claim Type Percentage of Claims Business Interruption from Data Breach 45% Social Engineering Attacks (Phishing, CEO Fraud) 25% Ransomware Incidents 20% Other 10% Businesses are using insurance to cover both direct financial losses and operational disruption as a result of the increase in ransomware attacks and social engineering scams. According to the report, growing contractual duties and regulatory constraints have caused the cyber insurance market to expand rapidly over the past 12 to 24 months. Regulatory compliance: Businesses are being forced to strengthen their cyber resilience in response to more stringent cybersecurity regulations and data protection rules. Contractual requirements: As part of their risk management framework, businesses, particularly in the BFSI and IT sectors, now demand that partners and vendors obtain cyber insurance. Risk assessments: Businesses are aggressively detecting weaknesses and obtaining insurance before problems arise. Eva Saiwal, Head of Liability Insurance at Policy Bazaar for Commercial, notes that “cyber insurance has evolved from a niche product to a business necessity.” The nearly 100% renewal rate suggests that businesses consider it essential. Cyber insurance is now a crucial component that facilitates business continuity in addition to financial recovery. Building a robust digital ecosystem will require incorporating insurance into cyber risk management plans as cyber threats increase.