There is a great market opportunity for new-age insurance products like cyber insurance, especially in tier 2 and 3 cities in India, said a new report by insurance marketplace Policybazaar. The report showed that 23% of respondents said that they have a cyber insurance policy in place.
On analysing consumer awareness levels on insurance products to mark the National Insurance Awareness Day (June 28th), Policybazaar surveyed over 4,500 of its online customers and visitors across product segments, including cyber insurance, mental health insurance, home insurance and pet insurance.
The report found, despite a nascent segment, cyber insurance seems to be the next big opportunity for the insurance industry, as there is a clear increase in the demand for cyber insurance and other new-age insurance products across the country, especially tier 2 and 3 cities, so as to combat the increasing cybercrime incidents.
According to the report, at 31% and 29%, the highest number of respondents from tier-2 and 3 cities respectively indicated the propensity to buy cyber insurance as opposed to 16% in tier-1 cities. However, out of those who had actually purchased a policy, 20% of respondents belonged to tier-1 cities, while 17% belonged to tier 2 and 3 cities. The figures represent a growing level of awareness towards effectively combatting intangible threats to crucial digital assets across India.
Aside from the potential opportunity in smaller cities, another interesting trend that emerged was the inclination towards buying family cyber protection plans. While the highest number of 45% insured customers purchased family plans, whereas 35% purchased individual and 20% were covered under corporate plans.
The study said that even among the non-purchasers, 53% showed an interest in buying family plans, which is the highest among all. This implies an apparent preference for overall comprehensive protection not just for individual cybersecurity, but also that of the entire family.
Nonetheless, it cannot be denied that there’s still a scope of coverage here. Nearly 20% of overall respondents had suffered a financial loss due to cybercrime and out of those, only 24% ended up buying the policy and 39% neither purchased nor considered buying one. Financial loss due to unauthorised transactions emerged to be the threat that most respondents (57%) wanted to cover through cyber insurance.