Kenya
Kenya
Ken
yaCyber
Cyber
Cyb
erSecurity
Securi
Sec
Security
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tyReport
Report
Report2015
2015
2015
Cybersecurity Perspective from the
Insurance Sector
George Kisaka | Head of ICT Audit, Britam Insurance
Cybercrime Assurance Rather Than Insurance
C
ybercrime is not a foreign
Partnerships between insurers and the
thing anymore and regional
traditional banking sector in offering
governments have finally woken
insurance cover, under the Bancassurance
and reputation costs among other
up to this realization. In the last year
model, was just the beginning and the
things in case a company is attacked.
there have been efforts to review
notable trend in the Kenyan insurance
Currently, cybercrime insurance is mostly
legislation and draft bills or set up
industry now is undoubtedly mergers
sold in developed countries due to the
government agencies and task forces to
and acquisitions (M&A). The trend is as a
complex underwriting and management
confront it. The Cybercrime and Computer
result of the search for growth and the
it requires. Locally, uncertainty still
Related Crimes Bill 2014 in Kenya and
upcoming regulations raising capital
exists on whether insurers have built
the Cyber Crime Act 2015 in Tanzania are
requirements within the industry and has
capacity to comfortably offer cybercrime
testament to this.
led to bigger and more robust companies.
insurance given it is an emerging area.
To therefore get the upper hand,
Most players are still grappling with
various companies are steadily adopting
questions relating to whether there is
and leveraging on ICT to streamline
need, market and technical capacity
operations, improve service, increase
(actuarial, underwriting, claims handling
insurance penetration and grow margins.
/processing, cybercrime risk mitigation
The number one motive for cybercrime
is financial gain, which puts insurers
and other financial service firms at the
greatest risk. A report by the Center for
Strategic and International Studies, a
etc.)
Washington-based think tank in 2014,
As insurers continue to make forays
estimates the annual cost to the global
into the internet, portals and mobile
Going forward it is expected to pick up
economy from cybercrime to be more
platforms, it is expected that cybercrime
locally. We expect to see it begin with
than US$400 billion. The report then
will spread into this industry too.
the local operations of larger global
and puts the financial services sector
Depending on the approach taken in
insurance companies that can leverage
2nd behind energy & utilities in annual
adoption of ICT, it could have more far
their experience in developed markets
cybercrime cost.
reaching consequences. Simply working
and sound financial backing before
with a core of the legacy systems in
slowly being embraced by their local
the background could be catastrophic
counterparts across the region. Indeed
as these may have limited capacity to
the first insurance cover against internet
withstand a cyber-attack.
related crime was launched in Uganda
The Insurance sector has for long been
a tech-laggard, a status that it could be
argued has in a way shielded it from
cybercrime. However, the banking sector
has blazed trails in demonstrating how
The insurance industry also finds itself
a focus on technological innovation,
included in the cybercrime debate not
through evolving advances such as
just as victims but as solution providers as
online and mobile banking, can be a
well by underwriting cybercrime risk. This
real game-changer, and the insurance
involves developing products to cover
sector is slowly joining the bandwagon.
legal expenses, compensation, restoration
in mid-2015. Given the prevalence of
cybercrime, cyber-attacks are a question
of when and not if. The topic here should
then be Cybercrime assurance rather
than insurance.
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