MUMBAI: Indian banks are increasingly
seeking insurance cover against fraudulent online transactions, including those
involving credit cards, as a rising use of plastic money and the ease of Internet business
potentially increase lenders' exposure to cases of data breach.
Data
from insurance companies show that large banks are opting for policies worth Rs
500 crore to shield against fraud, including online, while mid-sized banks are
going for policies in the range of Rs250-300 crore. "Demand for insurance policy
against phishing, skimming and Internet hacking has gone up in the last one
year," said TR Ramalingam, head of underwriting at Bajaj Allianz General
Insurance. "Enquiries have gone up and we are working on how to price the
product and working on the wording."
Earlier,
insurance policies did not include computer-related frauds, but now insurers
expect it to be big in coming days. The premium, which depends on several
factors, ranges between 1% and 2% of liability the bank is looking to insure.
In 2012-13, domestic banks lost Rs17,284 crore on account of fraud, according
to information obtained through the Right to Information Act. During the
period, 62 banks filed a total of 26,598 cases related to online
frauds. The situation has compounded the woes of the bank sector where
lenders are facing huge non-performing assets. "The policy covers cyber
extortion and breach of data privacy," said M Ravichandran, president,
Tata AIG General Insurance. "There is a lot of talk around cyber
insurance and people are actively looking to secure these exposures."
While
companies like Tata AIG have underwriting capabilities for these policies, for
others, it is reinsurance driven. Cyber extortion policy pays a ransom to a
person who has hacked into the bank's website with a threat to divulge, destroy
or steal confidential information. Last year, ATM cards of a leading private
sector bank's customers were skimmed and about Rs15.48 lakh stolen from
accounts.
0 comments:
Post a Comment