Selling insurance is always challenging, but this isn't the case with products like cyber insurance. Industry sources claim that the market is currently experiencing rapid demand growth and that insurance companies may not be ready to keep up with it just yet.
According to a number of insurance brokers, the need for cyber insurance has been growing over the past few years and is predicted to continue growing now that India has passed its own data protection legislation. However, because of the product's complexity and high claim rate, insurance companies are hesitant to offer it. Additionally, it might be very challenging for startups to be eligible for a suitable cover.
The need for cyber insurance has been progressively rising. In the last three years, the market has expanded at a compound annual growth rate of 27–30%, with a current valuation of $50–60 million, according to Dhirandra Mahyavanshi, CEO of insurance brokerage firm Turtlemint.
He continued by saying that India's need for cyber insurance is predicted to increase by about 30% over the next years.
Bimakavach, a recently licensed insurance broking startup, is placing a significant stake in this market.
Cyber insurance is a crucial component of Tejas Jain's comprehensive insurance product suite, which he is developing for modern small- and medium-sized enterprises to ensure the security of their operations. Jain founded Bimakavach.
"Software service providers and fintech companies store a lot of data, but historically they haven't taken the proper insurance coverage. Now, even their investors are pressuring them to get covered," Jain continued.
New generation companies are taking up products like cyber insurance, fraud protection, which includes both insider and third party fraud, directors and officers liability, etc. "With India passing the data protection law too, there are a lot of talks going on about cyber insurance coverage," Jain stated.