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Cyber Insurance


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Cyber Insurance

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Cyber Insurance

  1. 1. BIG DATA BIGGER RISKS Increased use of electronic data - Smart phones, laptops, credit cards Cloud Computing - Concentration of large amounts of data in one place Stringent laws related to data breach – Section 43 A IT ACT (India), Sectorial laws regulation by SEBI and RBI (India ), The Financial Services Modernization Act (U.S.) HIPAA (U.S.), EU directives Too Big to fail ……?– No. of records compromised 1.Ebay – 145 Mn 2.Target – 70 Mn 3.Adobe – 152 mn 4.Sony PS– 77 Mn 5.Yahoo Japan – 22 Mn
  2. 2. WHAT TRIGGERS A BREACH ? • BP employee loses laptop containing data on 13,000 oil spill claimants. •Malware installed in Target’s payment system. 40 MN credit card numbers compromised. •A phishing email disguised as originating from the RBI, promised its recipient prize money of Rs.10 Lakh within 48 hours, by giving a link which leads the user to a website that resembles the official website of RB with the similar logo and web address. Source: Ponemon Institute© Research Report 2013
  3. 3. Growth of data breach • 253 network breaches in 2013 as against 208 in 2011 • Eight breaches in 2013 exposed more than 10 MN identities as against 5 in 2011 • In total 552 Mn identities were breached in 2013 It is no longer an IT issue but an active business risk VICTIM COSTS Notification Call Center Identity Monitoring (credit/non-credit) Identity Restoration DIRECT COSTS Discovery/Data Forensics Loss of Employee Productivity INDIRECT COSTS Restitution Additional Security and Audit Requirements Lawsuits Regulatory Fines OPPORTUNITY COSTS Loss of Consumer Confidence Loss of Funding $14.00 $10.00 $40.00 $140.00 Cost per record: $204 © Ponemon Institute
  4. 4. Real life incidents 1. Commercial bank (over $5B in revenues, over $200B in assets) Lockbox containing backup tapes were lost in transit with tens of millions of personal data Over $10MM in crisis management has been paid to date Consumer class action suit has been brought 2. Online retailer (over $5B in revenues) Hacker accessed a server and obtained personal information of over 17 million customers Posted 2,000 records on a blog as proof and demanded over $1MM to not release the data To date over $1.5MM spend on Crisis Management expenses including notification and forensics Two class actions have been filed 3. Internet services company (about $1.5B in revenues) Unauthorized access led to viewing and downloading of personal information Multiple class actions have been filed Over $200,000 to date in defense 4. Credit card processor (over $1.5B in revenues) Employees allegedly accessed customer information of a client to make fraudulent transactions
  5. 5. CYBER CRIME INSURANCE VS OTHER LIABILITY POLICIES Let’s look at some policies which are usually bought to manage business exposures. I.Errors and Omission II.Commercial General Liability III.Crime Insurance Coverages PI/CGL/Crime insurances Breach response costs No Legal liability to others for loss of data Partial Intellectual property infringement Partial Loss of revenue due to network breach No Regulatory investigations and civil fines and penalties No Cyber Extortion No
  6. 6. HOW THE CYBER POLICY OPERATES ? Breach response costs Proactive forensic services, credit monitoring and cost of recreating data Crisis Management Expense Business interruption losses due to breach Ransom and security consultant costs Legal fees in connection with investigation Fines resulting from regulatory investigation  Liability of Loss of confidential information of individuals as well as corporates  Failure of network and information security to prevent the transmission of computer viruses or the penetration of a hacker  Infringement of a copyright by your website content Professional Indemnity Insurance HOW THE CYBER POLICY OPERATES ? Breach response costs Proactive forensic services, credit monitoring and cost of recreating data Crisis Management Expense Business interruption losses due to breach Ransom and security consultant costs Notification costs Fines resulting from regulator FIRST PARTY THIRD PARTY
  7. 7. WHO ARE THE VICTIMS? Businesses should buy Cyber insurance if Their business activity is dependent upon IT systems Confidential data is handled in the course of business They have significant online presence and operations They process electronic payments Are required to do so contractually
  8. 8. HOW CAN PRUDENT ASSIST ? Prudent has a specialist team of risk advisors including 6 dedicated liability lines professionals and 3 lawyers as full time employees We can help you in Arranging a review of the your IT systems through security experts Identifying gaps in your current insurances Designing a customized coverage solution for your cyber insurance needs Arranging the most cost effective cover from insurance and reinsurance markets Ensuring contract compliance from an insurance perspective Assisting you with the claims management in case of such an even Insurance Retention
  9. 9. Ajit Singh Dhingra Managing Director   Pavanjit Singh Dhingra Chief Executive Officer Alda Dhingra Vice President - International Businesses Vijay Rampal Senior Vice President & Principal Officer Sanjay Vig Vice President - Liability & Specialty Lines Vikas Singh Vice President - Reinsurance Mandar Dalvi Vice President - Reinsurance, Structured Products & Advisory H V Karkare Vice President - Reinsurance Tanuj Gulani Vice President - Specialty Lines
  10. 10. Mumbai 101, Tower B Peninsula Business Park Lower Parel Mumbai 400 013 Tel: +91 22 3306 6000 Fax: +91 22 3306 6088 Delhi NCR Plot No. 462, Udyog Vihar, Phase V Gurgaon Haryana 122 016 Tel: +91 124 3999 000 Fax: +91 124 3999 010 Bangalore Floor III, Sai Shakti 2207 Hal Stage III, 80 Feet Road, Kodihalli Bangalore 560 008 Tel: +91 80 3024 2000 Fax: +91 80 3024 2060 Chennai Flat 1, 5th Floor, Gokul Tower, Plot # 7, CP Ramaswamy Road Alwarpet, Chennai 600 018 Tel: +91 44 3021 8700 Fax: +91 22 4265 8281 Pune 2nd Floor, “Adhisthan” CTS No.2134, Vijaynagar Colony, Sadashiv Peth, Pune-411030 Tel: +91 20 6560 2744 Fax: +91 20 2546 3338 Hyderabad D No-6-3-1093, Space No-606 6th Floor, VV Vintage Boulevard Raj Bhawan Road Somajiguda Hyderabad 500 082 Tel: +91 40 4003 8054 Registered Office: 217 Prabhadevi Estate, V S Marg, Mumbai - 400 025 Composite Broker License No. 291 | CIN No. U70100MH1982PTC027681 Copyright © 2014 Prudent Insurance Brokers Private Limited. All rights reserved. Delhi NCR Eco Towers, 8th Floor, Plot No. 14, Sector 125, Noida 201 301