From an insurance
perspective, the insurable interest in the cyber space needs to be carefully
determined and appraised. Put differently, in whose interest will insurance be
considered and in the event of any loss, who will be compensated? While it is
easy to identify legal entities like private organizations and Ministries,
Departments and Agencies (MDAs) of government at Federal and State levels, common
cyber incidents like hacking, phishing, breaches and theft of data have been
known to have multiple effects that often require painstaking efforts and time
to verify the sources.
As understood,
cyberspace is a virtual global domain used by all but owned by no one and open
to attacks or failures from anyone. The size and enormity of this space, often
unimaginable, became better appreciated as more people all over the world
joined online platforms and downloaded apps for their use. Insurers are therefore
keenly interested in determining the insurable interest in this domain when
approached by users.
As we enjoy the
speed, convenience and efficiency of adopting innovative digital solutions in
our personal and business lives, our world becomes even more converged on the
cloud and through servers that we are assured are secured. However, such speed
with which the losses, damages and risks have increased due to human errors and
malicious attacks in the cyber world have not failed to attract the attention of
insurers.
The risks we live
with have forced people to demand that insurance companies should develop
solutions to predict and prevent risks rather than just wait for them to
happen. A good note of how COVID-19 has created losses that are beyond the
ability of insurance to address calls for stronger predictive actions when it
comes to cyber risks.
Interestingly,
cyber insurance as a product line in insurance, has been available since the
late 1990s as third-party liability insurance, then into the early part of the next
decade as direct coverage for incidents arising from the insured, and today as
packaged coverages because damage to insured properties have been traced to
cyberattacks and failures.
Typically, insurers
would be hesitant in providing cover where there is concentration of risks – a
situation where many parties are connected in a manner that exposes higher
probability of severity when the unexpected happens. This is how cyber risks
have been understood amongst insurers, little wonder, they are slow at exploiting
the seemingly huge opportunities for insurance in cyberspace.
Indeed, there have been regulatory discussions even beyond national boundaries to ensure that the evolving environment of cyber risks and cyber insurance are better monitored and evaluated to achieve effective collaborative actions against cybercrimes.
In Nigeria, as it
is globally, insurers have been building knowledge and expertise necessary for
the preventive and response management of cyber risks within the frameworks
that have been provided by Nigerian Information and Technology Development
Agency (NITDA), Central Bank of Nigeria (CBN) and Nigerian Communications
Commission (NCC). Interestingly, the National Insurance Commission (NAICOM) is
also working towards an industry position in its strategic plan for the next
five years.
My intention is
therefore to examine the preparedness of the insurance industry in Nigeria to
provide individuals, businesses and governments with the peace of mind they
need to have if they lose personal data or customers and citizens are misled to
record financial losses while engaging online, especially as our work
environments continue to change, due to the response to COVID-19 pandemic.
About two years
ago, there was an event around this with a view to promoting cyber insurance as
a product in the Nigerian market but it does not appear on the lists of
insurance companies following information available on their websites.
It is a good time
to advance whatever preliminary work has been done in this regard, possibly an
industry-wide conference to enable stakeholders to have reasonably relevant
knowledge before something goes amiss.
Currently, it is
not impossible that incidents that have been reported as claims by policyholders
may have been caused remotely by cyber risks yet attributed to other factors
due to the lack of the knowledge of the related impact by failures in
cyberspace.
What to expect now
is that the Federal Ministry of Communications and Digital Economy and Nigerian
Information and Technology Development Agency (NITDA) along with other
regulatory authorities will set the codes and principles, which will enable
NAICOM develop necessary guidelines for the underwriting of cyber risks.
Private
organizations are reminded that their businesses are prone to emerging cyber
risks and investing in tech solutions that prevent hackers is only one of the
ways of protecting themselves and cyber insurance would be the appropriate
remedy when there is unexpected damage to data and loss of information.
The times are dire but insurance has become more important!
About
the Author
Ekerete Olawoye Gam-Ikon, MNIM,
CPP, is a management consultant with a specialization in Strategy and
Insurance. You can contact him via e-mail olagamola@gmail.com and
mobile +234-806-648-1111
Most Recent Contribution
#PFSeries3 - Investing in Peace of Mind: Focus on
Insurance
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