The Evolution of Cyber Insurance
Introduction
India’s digital growth journey has been moving at a tremendous pace. According to MeitY’s report, India’s digital economy is expected to rise to US$ 500 billion by 2025, up from US$ 200 billion in 2019. The digitisation drive that we are experiencing is likely to foster and boost a favourable business environment that will attract rapid investment and augment economic growth across sectors. This will, in turn, compel businesses to adopt digital platforms as solutions to meet customer expectations. Due to accelerated digitisation, cyber risks often deter business growth. Cybercrimes are becoming more rampant and complex and the costs associated with such breaches are not only increasing but also becoming more systemic.
Development of the Cyber Insurance Landscape
Digitization of businesses started in the 1980s with the use of mainframes. Personal computers entered the game and further modified the landscape from the 2000s along with LANs, the internet and the dot-com boom of the 2000s. In the late 1990s, cyber-insurance was developed as a risk management tool to ensure information security. Coverage was limited, and clients included SMEs in need of insurance to qualify for tenders, or community banks too small to hedge the risks of their online banking operations. The first cyber insurance policy was written in 1997 through AIG, against hacking as a third-party liability policy.
The current trends in the cyber insurance space are focused on the prevention of cyber risks, which by nature are hard to outline and constantly evolving. The result is that the buyers have limited clarity on the types of cyber risks covered under cyber insurance, and even lesser visibility on the scope and amount of optimum coverage. Unfamiliarity with the claim procedure and resolutions, ambiguous claim thresholds during settlements, and confusion around exclusions and coverage of regulatory fines and penalties under a purchased scheme further discourage potential buyers from seriously investing in cyber insurance products.
Key Factors in Cyber Insurance Evolution and Its Role in Risk Management
The cyber insurance market in India has three key influencing factors, namely the speed of achieving digital maturity, government initiatives to digitise and enforce stringent cyber laws, and the evolving landscape with technology giants and MNCs entering the cyber insurance domain. The latter are the catalyst for intensifying competition in this market.
Advancements in technology in terms of AI, machine learning, big data, robotics, blockchain, augmented and virtual reality, and IoT are expected to reshape the insurance industry and help reach untapped audiences in a more digital-forward manner. With the absence of a standard cyber insurance policy, regulators need to take the following variables into consideration while developing cyber insurance policies: the risk insured against, the scope of the loss covered and the limits/ sub-limits.
Challenges
With the complexity of cyber risks increasing exponentially the challenges to counter the same are growing too which is leading to gaps in the coverage offered for cyber threats. Resultantly, the compliance regulations are dependent on the risks which exist and cyber threat actors adopt new technologies faster and exploit them to their benefit. A lack of historical data and predictability in future cyber risks, the possibility of large overwhelming loss events, uncertainties among market participants about what is specifically covered under such policies, and legal battles over fundamental issues are some of the challenges identified.
Future Outlook/ Recommendations
India's cyber infrastructure requires a multi-faceted approach that involves collaboration between government, industry, and academia should be developed. Some recommendations are:
- Risk assessments should be a general practice and the cyber insurance policies should be simplified, clearing the mismatch between the premium paid and insurance coverage and there should be standard verbosity across cyber policy language.
- Promoting R&D tailored to India focused on education programs that have public-private partnerships and global collaborations to share threat intelligence, best practices, and expertise in critical infrastructure protection.
- Cyber insurance can also be promoted as compliance with the DPDP Act, which would lead to better development of cyber infrastructure and cyber hygiene practices.
- Regular updates to cyber insurance policies to ensure relevance and effectiveness. Insurers could create and offer holistic cyber insurance risk management plans.
Conclusion
According to a report by Deloitte in 2023, the cyber insurance market in India is expected to grow by 27-30 per cent in the coming years and it is currently valued at USD 50-60 million, while maintaining a steady 27-30 per cent CAGR in the past three years. The Indian cyber infrastructure’s nature is challenging, however, it offers opportunities for growth, innovation, and collaboration. A proactive approach, supported by robust policies, advanced technologies, and skilled professionals, will be essential to building a resilient cyber infrastructure capable of withstanding evolving threats.
Reference
- https://www2.deloitte.com/content/dam/Deloitte/nl/Documents/financial-services/deloitte-nl-fsi-demystifying-cyber-insurance-coverage-report.pdf
- https://www.dnaindia.com/business/report-what-s-cyber-liablity-insurance-and-why-you-may-need-it-2136556
- https://economictimes.indiatimes.com/industry/banking/finance/insure/cyber-insurance-gains-momentum-in-india-set-to-witness-exponential-growth-deloitte/articleshow/104189297.cms?from=mdr
Related Blogs
Introduction
The United Nations General Assembly (UNGA) has unanimously adopted the first global resolution on Artificial Intelligence (AI), encouraging countries to take into consideration human rights, keeping personal data safe, and further monitoring the threats associated with AI. This non-binding resolution proposed by the United States and co-sponsored by China and over 120 other nations advocates the strengthening of privacy policies. This step is crucial for governments across the world to shape how AI grows because of the dangers it carries that could undermine the protection, promotion, and right to human dignity and fundamental freedoms. The resolution emphasizes the importance of respecting human rights and fundamental freedoms throughout the life cycle of AI systems, highlighting the benefits of digital transformation and safe AI systems.
Key highlights
● This is indeed a landmark move by the UNGA, which adopted the first global resolution on AI. This resolution encourages member countries to safeguard human rights, protect personal data, and monitor AI for risks.
● Global leaders have shown their consensus for safe, secure, trustworthy AI systems that advance sustainable development and respect fundamental freedom.
● Resolution is the latest in a series of initiatives by governments around the world to shape AI. Therefore, AI will have to be created and deployed through the lens of humanity and dignity, Safety and Security, human rights and fundamental freedoms throughout the life cycle of AI systems.
● UN resolution encourages global cooperation, warns against improper AI use, and emphasizes the issues of human rights.
● The resolution aims to protect from potential harm and ensure that everyone can enjoy its benefits. The United States has worked with over 120 countries at the United Nations, including Russia, China, and Cuba, to negotiate the text of the resolution adopted.
Brief Analysis
AI has become increasingly prevalent in recent years, with chatbots such as the Chat GPT taking the world by storm. AI has been steadily attempting to replicate human-like thinking and solve problems. Furthermore, machine learning, a key aspect of AI, involves learning from experience and identifying patterns to solve problems autonomously. The contemporary emergence of AI has, however, raised questions about its ethical implications, potential negative impact on society, and whether it is too late to control it.
While AI is capable of solving problems quickly and performing various tasks with ease, it also has its own set of problems. As AI continues to grow, global leaders have called for regulations to prevent significant harm due to the unregulated AI landscape to the world and encourage the use of trustworthy AI. The European Union (EU) has come up with an AI act called the “European AI Act”. Recently, a Senate bill called “The AI Consent Bill” was introduced in the US. Similarly, India is also proactively working towards setting the stage for a more regulated Al landscape by fostering dialogues and taking significant measures. Recently, the Ministry of Electronics and Information Technology (MeitY) issued an advisory on AI, which requires explicit permission to deploy under-testing or unreliable AI models related to India's Internet. The following advisory also indicates measures advocating to combat deepfakes or misinformation.
AI has thus become a powerful tool that has raised concerns about its ethical implications and the potential negative influence on society. Governments worldwide are taking action to regulate AI and ensure that it remains safe and effective. Now, the groundbreaking move of the UNGA, which adopted the global resolution on AI, with the support of all 193 U.N. member nations, shows the true potential of efforts by countries to regulate AI and promote safe and responsible use globally.
New AI tools have emerged in the public sphere, which may threaten humanity in an unexpected direction. AI is able to learn by itself through machine learning to improve itself, and developers often are surprised by the emergent abilities and qualities of these tools. The ability to manipulate and generate language, whether with words, images, or sounds, is the most important aspect of the current phase of the ongoing AI Revolution. In the future, AI can have several implications. Hence, it is high time to regulate AI and promote the safe, secure and responsible use of it.
Conclusion
The UNGA has approved its global resolution on AI, marking significant progress towards creating global standards for the responsible development and employment of AI. The resolution underscores the critical need to protect human rights, safeguard personal data, and closely monitor AI technologies for potential hazards. It calls for more robust privacy regulations and recognises the dangers associated with improper AI systems. This profound resolution reflects a unified stance among UN member countries on overseeing AI to prevent possible negative effects and promote safe, secure and trustworthy AI.
References
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Introduction
The spread of misinformation online has become a significant concern, with far-reaching social, political, economic and personal implications. The degree of vulnerability to misinformation differs from person to person, dependent on psychological elements such as personality traits, familial background and digital literacy combined with contextual factors like information source, repetition, emotional content and topic. How to reduce misinformation susceptibility in real-world environments where misinformation is regularly consumed on social media remains an open question. Inoculation theory has been proposed as a way to reduce susceptibility to misinformation by informing people about how they might be misinformed. Psychological inoculation campaigns on social media are effective at improving misinformation resilience at scale.
Prebunking has gained prominence as a means to preemptively build resilience against anticipated exposure to misinformation. This approach, grounded in Inoculation Theory, allows people to analyse and avoid manipulation without prior knowledge of specific misleading content by helping them build generalised resilience. We may draw a parallel here with broad spectrum antibiotics that can be used to fight infections and protect the body against symptoms before one is able to identify the particular pathogen at play.
Inoculation Theory and Prebunking
Inoculation theory is a promising approach to combat misinformation in the digital age. It involves exposing individuals to weakened forms of misinformation before encountering the actual false information. This helps develop resistance and critical thinking skills to identify and counter deceptive content.
Inoculation theory has been established as a robust framework for countering unwanted persuasion and can be applied within the modern context of online misinformation:
- Preemptive Inoculation: Preemptive inoculation entails exposing people to weaker kinds of misinformation before they encounter genuine erroneous information. Individuals can build resistance and critical thinking abilities by being exposed to typical misinformation methods and strategies.
- Technique/logic based Inoculation: Individuals can educate themselves about typical manipulative strategies used in online misinformation, which could be emotionally manipulative language, conspiratorial reasoning, trolling and logical fallacies. Learning to recognise these tactics as indicators of misinformation is an important first step to being able to recognise and reject the same. Through logical reasoning, individuals can recognize such tactics for what they are: attempts to distort the facts or spread misleading information. Individuals who are equipped with the capacity to discern weak arguments and misleading methods may properly evaluate the reliability and validity of information they encounter on the Internet.
- Educational Campaigns: Educational initiatives that increase awareness about misinformation, its consequences, and the tactics used to manipulate information can be useful inoculation tools. These programmes equip individuals with the knowledge and resources they need to distinguish between reputable and fraudulent sources, allowing them to navigate the online information landscape more successfully.
- Interactive Games and Simulations: Online games and simulations, such as ‘Bad News,’ have been created as interactive aids to protect people from misinformation methods. These games immerse users in a virtual world where they may learn about the creation and spread of misinformation, increasing their awareness and critical thinking abilities.
- Joint Efforts: Combining inoculation tactics with other anti-misinformation initiatives, such as accuracy primes, building resilience on social media platforms, and media literacy programmes, can improve the overall efficacy of our attempts to combat misinformation. Expert organisations and people can build a stronger defence against the spread of misleading information by using many actions at the same time.
CyberPeace Policy Recommendations for Tech/Social Media Platforms
Implementation of the Inoculation Theory on social media platforms can be seen as an effective strategy point for building resilience among users and combating misinformation. Tech/social media platforms can develop interactive and engaging content in the form of educational prebunking videos, short animations, infographics, tip sheets, and misinformation simulations. These techniques can be deployed through online games, collaborations with influencers and trusted sources that help design and deploy targeted campaigns whilst also educating netizens about the usefulness of Inoculation Theory so that they can practice critical thinking.
The approach will inspire self-monitoring amongst netizens so that people consume information mindfully. It is a powerful tool in the battle against misinformation because it not only seeks to prevent harm before it occurs, but also actively empowers the target audience. In other words, Inoculation Theory helps build people up, and takes them on a journey of transformation from ‘potential victim’ to ‘warrior’ in the battle against misinformation. Through awareness-building, this approach makes people more aware of their own vulnerabilities and attempts to exploit them so that they can be on the lookout while they read, watch, share and believe the content they receive online.
Widespread adoption of Inoculation Theory may well inspire systemic and technological change that goes beyond individual empowerment: these interventions on social media platforms can be utilized to advance digital tools and algorithms so that such interventions and their impact are amplified. Additionally, social media platforms can explore personalized inoculation strategies, and customized inoculation approaches for different audiences so as to be able to better serve more people. One such elegant solution for social media platforms can be to develop a dedicated prebunking strategy that identifies and targets specific themes and topics that could be potential vectors for misinformation and disinformation. This will come in handy, especially during sensitive and special times such as the ongoing elections where tools and strategies for ‘Election Prebunks’ could be transformational.
Conclusion
Applying Inoculation Theory in the modern context of misinformation can be an effective method of establishing resilience against misinformation, help in developing critical thinking and empower individuals to discern fact from fiction in the digital information landscape. The need of the hour is to prioritize extensive awareness campaigns that encourage critical thinking, educate people about manipulation tactics, and pre-emptively counter false narratives associated with information. Inoculation strategies can help people to build mental amour or mental defenses against malicious content and malintent that they may encounter in the future by learning about it in advance. As they say, forewarned is forearmed.
References
- https://www.science.org/doi/10.1126/sciadv.abo6254
- https://stratcomcoe.org/publications/download/Inoculation-theory-and-Misinformation-FINAL-digital-ISBN-ebbe8.pdf
Introduction
The first activity one engages in while using social media is scrolling through their feed and liking or reacting to posts. Social media users' online activity is passive, involving merely reading and observing, while active use occurs when a user consciously decides to share information or comment after actively analysing it. We often "like" photos, posts, and tweets reflexively, hardly stopping to think about why we do it and what information it contains. This act of "liking" or "reacting" is a passive activity that can spark an active discourse. Frequently, we encounter misinformation on social media in various forms, which could be identified as false at first glance if we exercise caution and avoid validating it with our likes.
Passive engagement, such as liking or reacting to a post, triggers social media algorithms to amplify its reach, exposing it to a broader audience. This amplification increases the likelihood of misinformation spreading quickly as more people interact with it. As the content circulates, it gains credibility through repeated exposure, reinforcing false narratives and expanding its impact.
Social media platforms are designed to facilitate communication and conversations for various purposes. However, this design also enables the sharing, exchange, distribution, and reception of content, including misinformation. This can lead to the widespread spread of false information, influencing public opinion and behaviour. Misinformation has been identified as a contributing factor in various contentious events, ranging from elections and referenda to political or religious persecution, as well as the global response to the COVID-19 pandemic.
The Mechanics of Passive Sharing
Sharing a post without checking the facts mentioned or sharing it without providing any context can create situations where misinformation can be knowingly or unknowingly spread. The problem with sharing and forwarding information on social media without fact-checking is that it usually starts in small, trusted networks before going on to be widely seen across the internet. This web which begins is infinite and cutting it from the roots is necessary. The rapid spread of information on social media is driven by algorithms that prioritise engagement and often they amplify misleading or false content and contribute to the spread of misinformation. The algorithm optimises the feed and ensures that the posts that are most likely to engage with appear at the top of the timeline, thus encouraging a cycle of liking and posting that keeps users active and scrolling.
The internet reaches billions of individuals and enables them to tailor persuasive messages to the specific profiles of individual users. The internet because of its reach is an ideal medium for the fast spread of falsehoods at the expense of accurate information.
Recommendations for Combating Passive Sharing
The need to combat passive sharing that we indulge in is important and some ways in which we can do so are as follows:
- We need to critically evaluate the sources before sharing any content. This will ensure that the information source is not corrupted and used as a means to cause disruptions. The medium should not be used to spread misinformation due to the source's ulterior motives. Tools such as crowdsourcing and AI methods have been used in the past to evaluate the sources and have been successful to an extent.
- Engaging with fact-checking tools and verifying the information is also crucial. The information that has been shared on the post needs to be verified through authenticated sources before indulging in the practice of sharing.
- Being mindful of the potential impact of online activity, including likes and shares is important. The kind of reach that social media users have today is due to several reasons ranging from the content they create, the rate at which they engage with other users etc. Liking and sharing content might not seem much for an individual user but the impact it has collectively is huge.
Conclusion
Passive sharing of misinformation, like liking or sharing without verification, amplifies false information, erodes trust in legitimate sources, and deepens social and political divides. It can lead to real-world harm and ethical dilemmas. To combat this, critical evaluation, fact-checking, and mindful online engagement are essential to mitigating this passive spread of misinformation. The small act of “like” or “share” has a much more far-reaching effect than we anticipate and we should be mindful of all our activities on the digital platform.
References
- https://www.tandfonline.com/doi/full/10.1080/00049530.2022.2113340#summary-abstract
- https://timesofindia.indiatimes.com/city/thane/badlapur-protest-police-warn-against-spreading-fake-news/articleshow/112750638.cms
