Tuesday, 19 February 2019

#IRMA2019: Key insights from ICICI Lombard’s ‘Managing New Age Risks’ survey.

ICICI Lombard Cyber Insurance

Technology, as we know, has become an integral part of our business enterprises. Industrial Revolution 4.0 which connects physical devices with electronic devices comes with new kind of risks. As the world is getting increasingly interconnected, everyone shares the responsibility of securing our cyberspace. Adopting preventive measures and cyber risk mitigation tools has become the need of the hour.

ICICI Lombard, India’s leading private sector general insurance company has commissioned a PAN India survey titled ‘Managing New Age Risk’ to assess the preparedness of Indian organisations towards new age risks. A detailed feedback of CXOs from 100 companies across various sectors was taken for this research.

Corporate dependence on insurance to cover the risk of cyberattacks is expanding in line with their increasing reliance on tech for everything from invoicing to engaging consumers on social media. Next-gen technologies such as Artificial Intelligence, Robotics, Cloud, Blockchain, IoT etc. are associated with new age risks like cyberattacks, data theft, cloud hacks etc. India was the target of 17% cyberattacks, second only to US (38%) between 2015- 2017 as per report released by Symantec Corp. The Indian Computer Emergency Response Team (CERT-In) reported 53,081 cases of cybercrime in the year 2017. More than 40,000 computers in India were jeopardised by Wannacry ransomware attack. Recently, a Pune-based co-operative bank lost nearly Rs 94 crores when hackers operating from abroad breached bank’s ATM servers.

As cyberattacks become more frequent and severe, the need for solid insurance coverage to plug potential financial losses is in demand.

ICICI Lombard’s ‘Managing New Age Risks’ survey delved into understanding the risks that Indian Inc. perceives as critical for business. It also looked at the role of insurers in managing risks from the lens of Indian firms. The survey findings were unveiled by Mr. Bhargav Dasgupta, MD and CEO, ICICI Lombard in the august presence of Prof. Kenneth Rogoff, Professor of Economics & Public Policy at Harvard University and a former Chief Economist at the International Monetary Fund.

The report highlights that companies still consider traditional risks as extremely crucial for their business. CXOs believed that assets like property, machinery and health & wellness of employees are pivotal risks and are needed to be insured. When asked about which risks have been gaining importance in the last 3 years, the response was clearly for new age risks such as hacking, data theft etc. 67% of India Inc. believes data thefts have increased substantially from the last 3 years, 63% feels that risks from cybercrime have increased substantially in the same period.

In terms of challenges to handle risks, 43% CXOs find new age risk incident to be unique, while 42% found it even difficult to identify the source of an attack, making it a tough task to manage. 21% company executives believed that new age risk incidents spread too fast, making it difficult for firms to handle them.

Lack of internal capabilities was a key takeaway when it came to preparedness of organisations in managing new age risks. 41% respondents believed that their existing systems were not equipped to handle these risks, while 39% respondents felt that there was a shortage of skilled manpower that could address these risks. 71% of respondents said that prevention of new age risks is the best way to deal with e-risks.

On the role of insurers, 81% companies believe that insurers are equipped to a certain extent in managing new age risks. Specifically, companies believe that insurers are better equipped to manage risks such as cloud computing (100%) and cyberattacks (69%). However, a majority of CXOs believe that e-risks like data thefts can be better managed internally.

New age risks are already a reality today, globally and in India. It is most critical that Indian firms take cognizance of this aspect. As is evident from ‘Managing New Age Risks’ survey, being prepared and having the right risk management framework in place is the need of the hour. ICICI Lombard is partnering with their clients to ensure that they are equipped with appropriate and adequate ‘risk management and mitigation’ solutions to effectively handle any prospective new age risk incidents.” - Mr. Bhargav Dasgupta, MD & CEO, ICICI Lombard.

In the digital age, cyberattacks will face a sharp incline in the years to come. Corporates and Insurance companies will have to combine synergies to fight these new age cyber risks in the interest of customers.

- Chaitanya Kulkarni.

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