Nepal Life Insurance

Worldwide increasing use of cyber insurance, Lack of Nepalese access to cyber insurance market

प्रकाशित मिति: १९ कार्तिक २०७४, आईतवार १३:००

सागर चन्द


Nov-5, Kathmandu.

Cyber protection is appearing as a great challenge day by day. The increased use of technology has also intensified the risk of cyber protection. The simplicity in work due to technology is going on parallel to the offensive cyber risk nowadays. With the increase in risk, the practice of cyber insurance has also started.Cyber insurance insures various types of commercial , personal softwares as well as internet stuffs.  According to Embroker online, more than 80%of the commercial purpose softwares are hacked . Among them, many of them even don’t know they are hacked . With the intensified level of cyber risks too , many commercials don’t realize the need of cyber protection even now .

Various people , great commercial institutions,  financial sectors as well as governmental sectors are targeted by the cyber attacks . With the development in technology , cyber attacks have become much difficult to be stopped . But the loss due to cyber attacks can be minimised however . The companies, using the data of common people , have higher risks of cyber crimes , for instance , financial sectors , telecoms,  health institutions , universities , etc . With the increase in cyber attacks , the practice of cyber insurance policy has started to minimise the economic loss due to such cyber attack . According to American online news portal CBS News , cyber insurance covering an amount of 3.25 billion american dollar amount is required annually . According to American Insurance Information Institution,  in 2015, 1.5 billion american dollar amount of premium was collected from cyber insurance policy merely . In an average , 7 billion american dollar of economic loss is suffered in America due to cyber attack. American is the largest premium collecting nation through cyber insurance . According to the survey of German insurance company , Munich re,  10% of the population is suffering from cyber attack by some jeans . In most of the cyber attack , important statistics and informations  are stolen . Cyber insurance protects the commercial as well as personal users from internet based risks . This insurance covers the risks related to statistics , information based loss ; extortion , theft  due to hacking , etc .

Still today , in the global market of insurance , Cyber insurance is in the starting phase. That is why , the effect owing to the risk of cyber attack is not easy to estimated and measured . Various cyber attacks are going on beyond the limit of protection coverage given by the cyber insurance . Some insurance companies have even started the underwriting measure to give effect to cyber insurance .

Due to cyber attack , billions dollars of loss is being suffered . The hacking of data and information , stores softwares of the company due to internal as well as external reasons  results in the loss of all investments and labour of the company . That’s why cyber insurance’s need has been felt . But still , the limit of coverage of cyber insurance are supposed insufficient today . The idea of cyber insurance came by the end of 1990 . In the initial phase , cyber insurance was used by the online trading companies . After the terrorist attack of America in 2001, the use of cyber insurance is said to be increased . In 9/11 attack , the important informations and data of airlines companies were said to have been stolen .

According to the survey of America in 2002, the market of cyber insurance was estimated to be 2.5 billion american dollars . But , contrary to the estimation,  coming to 2005 , the cyber insurance market reached 12.5 billion american dollars .

Still now , cyber insurance is taken as one of the most complex insurance policy . Lack of  actuary to estimate the appropriate insurance premium size and lack of related statistics are some challenging issues in this business . Similarly , the need of a company , intending to get insured by this policy, to assist the information technology department through all protective attacking stages has made the  cyber insurance ineffective inspite of its utility .

                Cyber crimes are insured abroad , but in Nepal , still this policy has not been regulated .

          Although Indian insurance companies had proposed Nepalese banks to insure the cyber crime risks earlier , but due to unmatching Nepal’s insurance regulation , Nepalese banks are not able to give consent to Indian companies proposals however .

Cyber attacks make your investment in the business risky . Cyber insurance is an economic shield of protection , during the circumstance of data hacking , unethical use of data , theft or loss due to internet activities . Cyber insurance is supposed to be different from general liability insurance . Cyber insurance notified the insured , regarding the theft or unauthorised user assess to the data . Cyber insurance aids in the restoration of the computerised data or information as well as aids in refixing the crashed computer system too . In it, data protection agreement , customer identification restoration , as well as protection related subjects can be insured . This is also I own as cyber liability insurance coverage ( CLIC) . In America , it is said ,1/3 rd of the companies , enter in this insurance contract . This insurance compensates the commercial loss due to cyber attack or loss .

Cyber insurance cost as well as premium depends upon the company’s  ( intending to get insured) type and it’s services as well as it’s investment . The riskiness of the company’s data as well as other users number  can also be the measure to estimate the premium. According to the American New institution , CIO,  by the payment of minimum 800 dollars monthly premium , cyber insurance can be done . In America only, from 2.5 billion to 3 billion premium is collected from cyber insurance .

Pirates of unauthorised software users cannot take this policy . The user of low rates software , then the required parametric measure of insurance company cannot take this policy too .

Cyber insurance policy are not still centred to the external attacks over the software . Most of the time , insurance policies are taken being centred around the internal irregularities or human errors . Inspite of that , cyber insurance policies do have the coverage from 5 million dollar to 50 million dollars . In America too , in 2016, cyber insurance premium collection is said to have increased by 35%. According to PWC Global , by the end of this decade , cyber insurance will cover the 2% of the global market . Globally , more than 130 insurance companies have publicly presented their own cyber insurance policies . By 2022, it has been estimated that , globally , cyber insurance market will be nearly of 14 billion American dollar .As per Allied Market Research , the growth rate of global cyber insurance is 28%. In 2016 , merely through cyber attack , globally 3 trillion american dollar loss was suffered . Globally , American International Group , Chubb , Zurich insurance , Excel Group , Berkshire Hathway , Allianz global, Munich ‘re group are supposed be main cyber insurance companies . These companies offer cyber insurance service worldwide . Various Indian insurance companies have too started the cyber insurance business . In India , more than 72% of the companies are risked with cyber attack . Within 1st  ten months of 2016, 39 thousand insurance attack incidents came before police . Marsh Insurance Brokers and private limited operated this service first of all in India . This company has been selling  5 hundred thousand dollar to 1 million dollars cyber insurance policies in India .

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