Flexible working arrangements in the midst of Covid-19 increased the risk of cyberattacks and drove up insurance costs to cover possible violations.

The pandemic has changed work processes with a hybrid model. Even though people are slowly returning to the offices, employees continue to log in remotely and are not tied to a single location. This has increased the incidence of ransomware and distributed denial of service attacks.

Cyber ​​attacks in the first half of this year exceeded the total number of cases reported worldwide for all of 2020, Sanjay Radhakrishnan, chief executive officer of Hero Insurance Broking India Pvt., Told BloombergQuint. This has led to a rush to seek insurance cover against such eventualities.

“Currently, cyber insurance accounts for less than 1% of total insurance industry sales in India and that could rise to 3-4% of total sales in the next three to five years,” said Radhakrishnan. The Indian cyber insurance market has reached around Rs.1,000 billion this year.

The growth potential is huge, especially after the pandemic. According to Pankaj Verma, Head (Underwriting) at SBI General Insurance Co., the cyber insurance market is expected to grow well beyond the previous forecast of $ 1 billion (Rs 7,500 billion) in three years’ time due to accelerated digital transformation.

TA Ramalingam, chief technical officer at Bajaj Allianz General Insurance Co., said all types of companies are concerned about cyberattacks and threats to their data security. “In contrast to large companies that have dedicated teams to manage cyber risks, small and medium-sized companies are increasingly looking for cover.”