Affordable Cyber Insurance: A New Shield Against AI-Powered Fraud

Insurers Offer Cover Against Cyberfraud For As Low As Rs 3 Per Day - News18

The insurance covers are made available for Rs 3 per day and are built to provide safety from identity theft, cyber extortion and online bullying. Nowadays, we have everything at our fingertips. We can do almost anything, be it shopping, meeting people, going out with friends, food, movies and millions of other things, with a tap of our fingers. But with the prevalence of technology, the dangers and incidents of cybercrimes are increasing at an alarming rate, especially financial frauds and deepfake videos. So, insurance companies have come up with "cyber covers," which aim to protect from cybercrime. According to the information given, the insurance companies are now opting for small cyber security covers called Sachet Covers, specifically designed to protect against the threats of cyber fraud. The insurance covers are made available for Rs 3 per day and are built to provide safety from identity theft, cyber extortion and online bullying. How is cyber fraud conducted? According to a report in The Times Of India, cybercriminals are experts in impersonating the closest to us and even company executives. It could include family members or senior company executives, while the impersonation is done through fake videos, voice clones or text messages, which are created with a software known as Generative AI. This software is infamous for creating alarmingly real-looking videos and audio. According to Parthanil Ghosh, the director of HDFC ERGO General Insurance, "Fraudsters are indulging in illegal activities by making pictures, videos and sounds like real with the help of AI." A Deloitte report stated that India's cyber insurance market is expected to see a growth of 27 to 30 per cent, in the next five years. In 2023, it stood at 50 to 60 million dollars, the reports added. Since the market and the risks associated with it are continuously growing, the insurance coverage for AI-based fraud is being considered by the companies. Earlier, the cyber-related risks were limited to SMS phishing, fraudulent calls and OTP theft but now, people are more cautious of these methods, giving the cybercriminals a way to evolve. The Lockton India CEO, Sandeep Dadia states, "The risks with Gen AI have now moved beyond financial loss to reputational damage and emotional stress generated by harassment."

'Sachet' covers now guard against cyber fraudsters using AI

A recent study by Deloitte said that India's cyber insurance market worth $50-60 million in 2023 is expected to grow at an annual rate of 27-30% in the next five years.Insurance companies are building a slew of sachet-sized products that offer protection against growing instances of cyber fraud. These risk covers, some costing as low as Rs 3 per day, are designed to insure individuals and businesses against the threat of impersonation, cyber extortion, bullying and identity theft that are on the rise in an AI-driven environment, industry executives said. The typical modus operandi for cyber frauds is to use fake videos, voice clones, or text messages impersonating executives, family members, or trusted authorities. "(Fraudsters) are using the ability of GenAI to create hyper-realistic video, photos, audio to impersonate individuals and indulge in illegal activities," said Parthanil Ghosh, Director at HDFC ERGO General Insurance, which has launched a cyber sachet insurance policy covering both businesses and individuals against malware and ransomware cyber-attacks. A recent study by Deloitte said that India's cyber insurance market worth $50-60 million in 2023 is expected to grow at an annual rate of 27-30% in the next five years. "As the market and associated risks continue to evolve, coverage for AI-based social engineering attacks is often provided with sub-limited covers," according to Gaurav Arora, chief of corporate underwriting, claims & property at ICICI Lombard. Evolving Risks Previously, technology-based risks centred around SMS phishing, fraud calls, OTP thefts. "(These) are no longer working for attackers as the public is fairly aware of such primitive methods," said Sandeep Dadia, CEO at insurance broking company Lockton India. "Now, with GenAI the risks go beyond financial loss towards reputational loss, emotional distress caused by harassment," he added. Experts are of the view that the Digital Personal Data Protection Act will also form a strong basis of legal protection. "Organisations are now directly accountable for breach of personal data which has caused harm to any individual," Dadia said. Prevention better than cure As AI continues to advance, leading to greater accuracy in deep fake videos, traditional methods of authentication, such as voice and facial recognition, become less reliable. Deep fakes closely mimic the original voices and mannerisms of the individuals being impersonated. HDFC's Ghosh said that due to constant evolution of technology, it becomes daunting to detect such frauds. His company conducts regular training to sensitise employees about potential cyber threats and how to identify deepfakes. ICICI's Arora said that besides insurance protection, organisations must implement multi-factor authentication to secure financial transactions and access to sensitive data, deploy AI-based detection tools to identify deep fakes and anomalies in communication.