Insurance demand raised by increasing cyberattacks

The increase in cyberattacks in the country has engendered growth in demand for insurance cover by corporate organizations in order to alleviate risk.

Insurance operators, especially those in the financial sector who were vulnerable to huge financial losses from cyberattacks reveal that they had commenced designing policies to meet rising demand of clients.

Adetola Adegbayi, the Executive Director of Leadway Assurance, stated whilst speaking at a cyber risk seminar in Lagos that cyber risk insurance was a new area that insurers were exploring in a bid to provide value to their clients as cybercriminals are leveraging on improved technology globally.

She educated on the different sources of the attacks which can either be external or internal with the organizations made more vulnerable to attacks as a result of weak structure and control within the organizations.
She further stated that most of these attacks are hid from the public by the organizations in order to protect their reputation.

She stated that “cyber risk insurance is relatively new and we in the insurance industry are beginning to look at it and say we must play a part in it because the risks that our customers face are changing. Clients’ demands are more and we need to meet these demands.”

“Risk is just for us to understand and provide the appropriate policies to cover it. Before we begin to look at the potential to the industry, we have to examine the security to the client,” she added.
She therefore beckoned on the Central Bank of Nigeria to provide regulations that would ensure banks use portions of their mandatory capital reserves to cover for cyber inadequacies.

Four other African countries were numbered with Nigeria as part of the world’s highest risk countries in the latest Global Threat Impact Index published by Check point software Technologies Limited this year with Zambia ranking highest, Nigeria in second position, while Uganda, Malawi and South Africa placed in 7th, 8th and 9th respectively.
The Cyber Risks Manager, the Chubb Corporation, Mr. Gilbert Flepp, stated the need for experts to intervene to assist in identifying cyber risks and quantifying business impact.

Flepp stated that insurers could provide cover for money paid to end cyber extortion which could destroy confidential information, corrupt or delete data stored in the IT system and deny authorized access to a computer system.

Source: The Punch