Onsurity helping businesses insure against rising digital threats

As cyber threats escalate with internet growth, Onsurity introduces comprehensive coverage for SMEs, navigating risks and ensuring business resilience

Over the past few years, investments in technology and the affordability of internet services have largely driven the story of Digital India. However, as Indians come under the digital fold, they are exposed to various cybersecurity risks.

In such a rapidly changing scenario, where businesses and individuals are constantly exposed to cyber threats such as data leaks, breaches, digital theft of funds, and ransomware attacks, it has become increasingly critical for companies to have cyber insurance coverage, according to Yogesh Agarwal, founder and CEO of insurtech startup Onsurity.

The Bengaluru-based company, which rolled out its cyber insurance product in September, offers D&O (directors and officers) liability insurance, commercial general liability insurance, and a monthly subscription-led employee healthcare benefits plan, among others.

“In India, SMEs (small and medium enterprises) have never been offered the right product when it comes to business insurance due to low insurance penetration and distribution channels. We thought about how we can make our platform more comprehensive for SME customers,” Agarwal said.

The insurance penetration rate in India is pegged at 4.2 per cent, as opposed to the global average of 7 per cent, according to data from the Nasscom-ICICI Lombard report.

While Indian businesses may face multiple risks during their lifetime, cyber insurance - still a young insurance product in India - can cover digital risks arising from a breach of cybersecurity.

“It costs Rs 50,000 per year for a business to get a cyber insurance cover of Rs 1 crore on the Onsurity platform. There are coverages that compensate the insured or SMEs for losses in the event of a data breach or a cyber attack,” Agarwal explained.

The relevance of cyber insurance will grow from here.

Active internet subscriptions in India are poised to rise to over 900 million by 2025, according to data from the Nasscom-ICICI Lombard report. Moreover, the penetration of smartphones during the same time will breach the 1.1 billion mark.

That said, as the penetration of internet services and smartphones increases, India faces the risks of cyber threats.

In 2022 alone, India reported a total of 1.39 million cybersecurity incidents, Union Minister of State for Electronics and IT Rajeev Chandrasekhar informed the Parliament in February this year.

To mitigate losses caused by these cyber threats, insurance partners, with the help of specialized teams, negotiate with a cyber attacker and help companies restore their business.

Insurtech companies like Onsurity rely on an incident management team trained in tools and techniques that can control the extent of damages.

The role of such teams gains precedence, especially in cases where attackers demand a ransom from victims to unblock access to a company's data.

“Incident management teams help businesses negotiate with the attacker, discuss the ransomware quantum, and understand if the amount should be paid or not. During market research, we found that SMEs lack the skills to manage such incidents,” Agarwal elucidated.

These teams help companies lay out a recovery plan which may include working out a ransom demand or even paying for the same.

Onsurity said it is building a complete awareness pack for its customers so they know how to report and manage these events.

“That is how we can actually make sure the business does not get interrupted, and one can get back on their feet. To pay or negotiate a ransom is the judgmental call of the cyber expert team deployed by the insurer,” he added.

Businesses should also be trained to use backup data facilities to ensure operations are up and running so that the business does not get affected.

Cyber insurance may also cover legal costs arising from any data leaks after the company reports a cyber attack, according to Agarwal.

Moreover, for insurtechs like Onsurity and its partners, it is important to have a credible system of underwriting and risk assessment of customers in place.

“One should understand which industry the SME is operating in and what is the size of its business. The other important part is what kind of cyber risk vulnerability they possess, the type of internal controls, and cybersecurity measures that they have implemented. These factors are considered before underwriting any customer,” he said.

Agarwal further stressed the importance of awareness about cyber insurance and other insurance products across tier three and four regions in the country.

“The success mantra for us is that when we reach out to SMEs, we get access to their employees and their family members. We have observed that even though the employers are present in tier 1 or tier 2 cities, their employees and family members are present in smaller towns and districts in India,” he added.

Onsurity raised $24 million in a Series B funding round with participation from the International Finance Corporation (IFC) and existing investors such as Nexus Venture Partners and Quona Capital last month.