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News Update

How cyber insurance can drive inclusive economic growth


11:28 am July 5, 2023

Stakeholders in the insurance sector have stressed the need for a strong cyber insurance market to provide businesses with protection against risks associated with increased usage of digital technology.

They said this has become necessary given the increased dependence of more organisations on digital technology for exposure and operations, spurring the need for security, as the digital space is very prone to attacks and security breaches from hackers. 

This is even as government agencies are looking for ways to better reinforce the digital ecosystem,while this will build trust in insurance services, it will also soar insurance adoption and acceptance in the country." 

Low insurance penetration in the Nigerian market, compared to acceptance levels in other countries and despite the wide room for growth, is still a major source of concern for stakeholders in the industry. Cyber insurance is a product that enables businesses to mitigate the risk of cybercrime activity like cyber-attacks and data breaches. It protects organisations from the cost of internet-based threats affecting IT infrastructure, information governance and information policy, which often are not covered by commercial liability policies and traditional insurance products. Cyber insurance comes as an opportunity to change the perception of the low acceptance for wide coverage, which works the same way, as businesses would purchase insurance against physical risks and natural disasters. It covers the losses an enterprise may suffer as a result of a cyber-attack. 

Cyber insurance is increasingly becoming essential for companies in both the private and public sector as the risks of cyber attacks against applications, devices, networks and users grow. That is because the compromise, loss, or theft of data can significantly impact a business, from losing customers to the loss of reputation and revenue. 

"Organisations may also be liable for the damage caused by the loss or theft of third-party data. A cyber insurance policy can protect the enterprise against cyber events, including acts of cyber terrorism, and help with the remediation of security incidents. This seems to be a new premium revenue drive for underwriting companies, to increase their yearly financial performance, only if industry stakeholders consider and institutionise it with both private and public establishments." 

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