The frauds occurring during the various online transactions have increased largely especially the ones dealing with credit card usage. It is majorly because of the easy and effortless use of internet which has welcomed illegal acts of data breach and forced banks to go for insurance cover. Insurance companies are seeing large number of enquiries from the banks. Where the large banks are purchasing policies worth Rs. 500 crore, the mid-sized or smaller ones are opting for Rs. 250-300 crore. As per the head of underwriting at Bajaj Allianz General Insurance, TR Ramalingam, the insurance demands have increased against internet hacking, skimming etc.
Expanding the insurance policies, the insurers are now including computer-related frauds etc. which were not included earlier. The premium varies from 1% to 2% of liability the bank wishes to have. The premium depends on various factors which affect its amount. As per the Right to Information Act, domestic banks faced a loss of Rs. 17284 crore in 2012-13 and around 26, 598 cases of fraud were filed by 62 banks. President of Tata AIG general Insurance, M Ravichandran said cyber insurance policy will provide cover against cyber extortion and breach of data privacy. Also, people are showing more interest in securing their exposure through cyber insurance. Tata AIG and similar companies are reinsurance driven and have the ability to do the underwritings. A person who has hacked the bank’s website with an intention of stealing or destroying information is paid under cyber extortion policy.
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