Vijay Valecha, Special to Khaleej Times July 25, 2021
A recent report by the “Munich Renaissance” company stated that the size of the electronic insurance market (against cyber risks) in the Middle East amounts to $400 million, or 5.7% of the global market size that exceeds $7 billion, while the UAE and Saudi Arabia are the largest markets in the Middle East with an average growth rate. Annually more than 30%.
Experts in the insurance sector confirm that a promising market for cyber-risk insurance has begun to take shape in the UAE, especially with the significant increase in attempts to hack websites and data threats recently, especially after the “Corona” pandemic, pointing out that there is a large gap between the amounts of cyber insurance coverage on the one hand and the losses that On the other hand, companies suffer from various cyber-attacks.
The increasing proliferation of Internet-related devices connected to the World Wide Web, which will reach about 300 billion devices by 2022, is a major window for hackers to steal data and cause various damages to companies, especially with the absence of protection software in those devices, which is the weakest link in terms of penetrability. Hardware is a major factor in the growth of the cyber insurance market in the next stage, especially in conjunction with the transformation of the Internet from controlling information to controlling devices.
Devesh Mamtani, Director of Financial Risks, Head of Investments and Consultations at Century Financial, confirmed that many insurance companies have recently started expanding in this field, expecting that cyber-risk insurance will be one of the most promising sectors in the coming stage. He added, “Electronic insurance is a fairly new field in the Middle East, but it is growing very fast. Insurance companies are expanding product offerings in this area as there are many first-time buyers while existing buyers are increasing the size of the insurance ticket. In addition, companies offer products that protect against the high costs of a data breach or malware attack. Network security and privacy, network disruption, compensation for data breach lawsuits, and media liability are among those covered by cyber insurance.”
He continued, “Many companies still view cyber-risk insurance as a financial burden due to the lack of awareness of these products and risks, while banks, financial and investment companies, as well as companies in the industrial sector, are the companies most vulnerable to cybercrime.”
Mamtani said that important international regulatory changes, such as the European Union’s General Data Protection Regulation, will raise awareness about data and cybercrime in the region. He added: “We also expect the UAE government’s initiatives and support to improve cybersecurity across various sectors such as energy, healthcare, transportation, banking, financial services and insurance, to increase the demand for electronic insurance in the coming years. Moreover, the increasing number of cyber-attacks in recent years has contributed to raising people’s awareness about the costs of disrupting IT networks and losing data.”