Optima Insurance Brokers Pvt. Ltd.

Marine cargo insurance policies are vital for the businesses involved in the transportation of goods, in particular shipping across the Israel-Gaza region. War damage coverage has the potential to increase the reinsurance rates which is causing jitters amongst the Indian Insurers amidst the ongoing military conflict in a region of the world that has immense trade value and importance.

HDFC Ergo and other Insurance companies in India have strategically opted to cancel the coverage for damages as a result of sabotage, strikes, riots, lockouts, and vandalism in Israel/ Gaza/ Lebanon because of the ongoing war. This will help reduce the risks associated with war-related actions.

The prime reason for such a move is the mounting concern on account of the rising reinsurance costs associated with such conflicts. This will help Insurance companies in India to keep claims in check and mitigate its potential impact on reinsurance premiums and rising costs.

A Deloitte report has forecasted that the Indian cyber insurance market will grow by 27-30% in the coming years. The current market valuation stands at $50-60 million, maintaining a steady compound annual growth rate (CAGR) of 27-30% over the past three years.

This growth is primarily led by increased awareness of cyber insurance needs. Industries focussing heavily on digitization like IT, pharma, and manufacturing, and prime movers of economic growth like supply chain, retail, critical industries, and finance, are expected to be the prime targets of cybercriminals, being early adopters.

As per the report, willingness was most prominent among mid-sized firms. Surprisingly, leading companies in the consumer sector taking care of substantial consumer databases sounded a cautious approach to expanding their digital infrastructure budget but with an earnest desire to boost their insurance coverage.

One major finding of the survey was that about three-fourths of respondents possessed cyber insurance coverage of Rs 100 crore or less, with over 50% having less than Rs 10 crore of coverage.