Small and medium-sized enterprises (SMEs) are the backbone of the Indian economy, accounting for over 90% of all businesses and employing over 40% of the workforce. However, SMEs are more vulnerable to cyberattacks than larger enterprises.
The repercussions of cybercrime on these businesses are severe. A Cisco report from 2021 indicates that Indian SMBs lost up to INR 7 crore in cyberattacks in the year 2020-2021. Perhaps the most concerning aspect is the fact that SMEs are largely underserved when it comes to cyber insurance.
Given the alarming rate of cyber crimes, there is a rising need for cyber insurance to protect SMBs from the potential losses and liabilities arising from cyber incidents. Hence, Onsurity launched cyber insurance for SMEs in August.
Onsurity is India’s first monthly subscription-led employee healthcare benefits provider. Their latest offering, Cyber Insurance for SME businesses, is their first non-health product under Onsurity Plus.
In this exclusive interview with ProdWrks, Yogesh Agarwal, Founder and CEO of Onsurity, shares insights into the need for Cyber Insurance for SMEs. Join us as we discover how Onsurity is helping Indian SMEs battle cyber attacks.
(This interview has been edited for clarity and length.)
Q. What was the market gap identified for launching Cyber Insurance for SME businesses in India?
Yogesh: In a recent report by the CyberPeace Foundation, it was revealed that a staggering 43% of all cyberattacks target these small enterprises. This is particularly alarming given that SMEs typically operate with constrained resources and often prioritize business development over cybersecurity measures.
The report also highlights a glaring lack of awareness, with nearly 46% of SMEs needing a clear strategy to manage cyber risks. This knowledge gap exposes them to threats they might not even recognize, making them more vulnerable to cyberattacks.
Recognizing this urgent need for support in managing cyber risks, we launched our Cyber Insurance product for SMEs in August. The product aims to bridge the divide by offering tailored insurance solutions that are specifically designed to align with the unique challenges faced by small businesses in our country.
Q. How does Onsurity differ from traditional insurance players/platforms?
Yogesh: Every SME business is unique, with its own set of challenges and specific requirements. Unlike traditional insurance providers that often offer one-size-fits-all policies, we take a tailored approach. We understand the importance of aligning insurance coverage with the specific cyber ecosystems of each SME client. This means we go beyond generic offerings and collaborate closely with our clients to design bespoke coverage that precisely matches their risk exposure and insurance needs.
Furthermore, we are acutely aware that SMEs often operate with budget constraints. While traditional insurance models may not always be sensitive to these financial limitations, Onsurity is dedicated to making insurance accessible and affordable for small businesses. We work with our clients to create insurance solutions that not only provide robust protection but are also well-suited to their budgets.
Q. How do you educate businesses about the importance and benefits of Cyber Insurance?
Yogesh: To educate and engage businesses on the significance and advantages of Cyber Insurance, we’ve adopted a multi-pronged strategy. With the recent launch of our business risk solutions, we’re actively working to enhance awareness, especially in areas like cyber insurance, which currently has limited understanding and adoption in India.
We harness the power of social media and informative newsletters to effectively convey the importance of cyber insurance, shedding light on the potential risks of cyber threats. We also actively participate in relevant events, ensuring we reach the right target audience.
Our goal is to empower businesses with the knowledge they need to protect their digital assets and financial well-being. By making cyber insurance more accessible and understandable, we’re focused on ensuring that businesses have the protection they require in today’s ever-evolving digital landscape.
Q. What type of businesses need cyber insurance?
Yogesh: Any company that heavily relies on information technology to drive its operations or handles confidential data should consider Cyber Insurance. This includes organizations that work with sensitive customer information, financial records, or proprietary business data. Protecting this data is not just good practice; it’s essential for maintaining trust and safeguarding against potential breaches.
Moreover, with the new Digital Personal Data Protection (DPDP) bill, businesses that collect, store, or utilize consumers must buy a cyber insurance policy. This is a critical step to ensure compliance and comprehensive protection in case of data breaches.
Today, even small businesses and Micro, Small, and Medium Enterprises (MSMEs) are embracing digitization to scale and grow their operations. The reality is that cyber threats, including ransomware and malware attacks, do not discriminate based on a company’s size. These attacks can have a profound impact on businesses, not only in terms of financial losses but also in damage to reputation and customer trust.
Q. How does Cyber Insurance from Onsurity mitigate business and operational risks?
Yogesh: Our Cyber Insurance offering serves as a powerful safeguard against an array of business and operational risks. In today’s digital landscape, we understand that comprehensive protection is essential, and that’s precisely what our Cyber Insurance product provides.
Our approach goes beyond just compensating for losses resulting from cyber breaches. We offer a holistic solution that includes:
- Insurance Coverage: We provide coverage to indemnify businesses against the financial losses incurred due to a cyber breach. This financial safety net ensures that your business remains resilient when faced with unexpected cyber threats.
- Incident Response Plan: Our Cyber Insurance includes a well-prepared incident response plan. This plan is a critical resource that equips organizations to respond promptly and effectively in the event of a cyber incident. Having a structured plan in place can significantly reduce the impact of a breach.
- Access to Expert Vendors: We recognize that addressing a cyber incident often necessitates specialized expertise. Therefore, our Cyber Insurance offers access to a network of experts in various domains, including legal guidance, IT forensics, consumer notification, and public relations.
Q. How do you see Cyber Insurance playing a pivotal role in safeguarding SMEs, considering the evolving digital landscape?
Yogesh: Cyber insurance can provide coverage for a wide range of cyber risks, including data breaches, ransomware attacks, and business interruption. It can also help SMEs improve their cybersecurity posture by offering risk management services and training.
As SMEs increasingly adopt ONDC to expand their online presence, it will become even more important for them to have cyber insurance in place.
Q. How do you see the Digital Personal Data Protection (DPDP) Bill influencing the prioritization of cybersecurity, and what role can Cyber Insurance play in helping businesses comply with these regulations?
Yogesh: The new Digital Personal Data Protection (DPDP) Bill is a significant step towards strengthening the protection of personal data in India. The bill is likely to have a profound impact on the prioritization of cybersecurity by businesses operating in India, fostering a culture of vigilance and pushing companies to invest in cybersecurity technologies, threat detection, and incident response capabilities.
Cyber insurance can provide financial protection during a data breach or other cyber incident. This can help businesses cover the costs of notifying individuals, investigating the incident, and implementing remediation measures. Second, cyber insurance providers can help businesses identify and assess their cybersecurity risks. They can also provide businesses with recommendations on how to mitigate these risks. They can provide businesses with expertise and guidance on implementing best practices in cybersecurity.
With the new DPDP bill, it is imperative for businesses to proactively address cyber risks and data breaches. Cyber insurance can equip businesses not only as a defensive tool but also as financial protection, aiding in DPDP Act compliance.
Q. How does Onsurity's partnership strengthen your offerings and ensure the best possible protection for businesses against cyber threats?
Yogesh: We have partnered with India’s leading insurance companies and their AA-rated reinsurers to bring cyber insurance to SMEs. Some of our partners include ICICI Lombard, Tata AIG, and Bajaj Allianz General Insurance, among others. These partnerships strengthen our offerings by providing financial strength, expertise, and pan-India reach.
These insurers have extensive experience in handling cyber insurance claims, which is essential for helping businesses recover from a cyber-attack quickly and efficiently.
Q. What are your future growth and investment plans?
Yogesh: We recently raised $24 million in our Series B funding from International Finance Corporation (part of the World Bank group), Nexus Venture Partners, and Quona Capital. So far, we’ve raised a total of about $40 million.
We will utilize this funding to work with its insurance partners to facilitate an unparalleled claims experience for its members by co-creating a technology solution to drive a seamless and transparent journey. This initiative is particularly geared towards eliminating prolonged waiting periods and uncertainties typically associated with claims. This will ensure that all our members experience a fully digital, transparent, and efficient benefits utilization journey that is powered by Artificial Intelligence (AI).
Additionally, these funds will bolster our overarching vision of forging partnerships with 50,000+ companies and provide coverage to over 5 million lives by 2026.