Insurance technology startup Surestart has developed an insurance offering for digital businesses and their customers that will cover the costs and damages caused by privacy breaches or network security breaches.
Such items were previously uninsurable, says Surestart executive director Travys Wilkins.
“There are high costs and potential damages when informing your customers of the cybercrime issue and it needs to be resolved as quickly as possible after an incident. Cyber-insurance covers these costs.
“South Africa has quickly migrated to remote working and digital business on account of Covid-19 and, consequently, instances of cybercrime are increasing, including data leaks, ransomware, identity theft and fraudulent financial losses,” he points out.
Ransomware is one of the most pressing issues for cyber-insurers globally. In the past five years, the average ransom demand has increased almost twelve-fold to $175 000, or almost R2.5-million, from $15 000. Data breaches are another serious issue in cyber-insurance. Even top tech businesses globally have not been able to avoid these, including several high-profile data breaches in 2021, Wilkins says.
Surestart provides cyber-insurance products to businesses to cover themselves against ransomware, security breaches and financial losses, and also allows online businesses to create an additional revenue stream by on-selling cyber-insurance to their customers.
“Cyber-risk is not only of concern to businesses; consumers are also at risk. The two biggest individual cyber-risks for consumers are identity theft and theft of funds when there are breaches in online banking financial services. According to the South African Fraud Prevention Service, identity theft in South Africa is up by 337% [so far] in 2021,” he notes.
Additionally, consumer use of online banking is increasing, but this comes with financial losses should a bank account, payment card or mobile wallet be hacked. Customers who use banking applications lost 88% more last year than in 2019 and online banking losses increased to an average loss of R32 298 per transaction.
Surestart offers insurance coverage for theft of funds, identity theft, data restoration or malware decontamination, cyber-bullying, cyberstalking and loss of reputation, cyber-extortion, privacy and data breaches, and network security liability.