Click, Insure, Relax: India’s New Mantra for Digital Peace of Mind

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With internet penetration and online transactions increasing at a fast pace in India, the nation is seeing an astronomical increase in cyber fraud, which has triggered strong action by the government, regulators, and industry players. On June 14, 2025, a series of announcements and initiatives highlighted the potential of cyber insurance as a risk management tool in India's changing digital economy.

Key Highlights:

Government Initiative for Cyber Insurance:

The Finance Ministry, which is headed by Nirmala Sitharaman, has requested all government insurance companies to introduce affordable and accessible cyber insurance plans.
The mandate is to protect consumers against cyber attacks such as phishing, UPI frauds, identity thefts, and unsolicited online transactions.
The Ministry has also called for digitalization of insurance services, faster grievance redressal, and more customer engagement through digital media.

Regulatory Needs and Compliance:

IRDAI (Insurance Regulatory and Development Authority of India) has come out with new guidelines requiring insurance firms and intermediaries to report cyber attacks within six hours of occurrence.
Board-level responsibility has been reinforced with firms compelled to submit cybersecurity procedures and response plans to the board and IRDAI minutes.
IRDAI is also pushing for the adoption of standardized cyber insurance policies and better claim procedures to drive higher take-up, especially among small businesses and individuals.

Industry Working Together and Building Capacity:

National Payments Corporation of India (NPCI) and Institute for Development and Research in Banking Technology (IDRBT) have signed an MoU to improve cyber resilience of digital payments.
Activities include a security certification program, access to advanced threat intelligence platforms, and specialized training for financial industry professionals.

Market Trends and Challenges:

Cyber insurance penetration is growing, but less than 1% of Indian businesses are covered, against over 30% in advanced economies.
The market is poised to grow over the next five years at 25-30% CAGR owing to increasing awareness and government support.
Challenges are high rates, low claims, and a shortage of seasoned cyber underwriters.

Conclusion: As losses due to cyber fraud doubled in 2024 and online threats became more advanced, India is rapidly embracing cyber insurance as an urgent risk management tool. The government, regulators, and industry are working together to build a cyber-resilient digital infrastructure and protect consumers and businesses from the growing risk of cybercrime.

Source:

Times of India, Bima Bazaar, IRDAI, NPCI

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