Banks, OFIs explore insurance to mitigate loss

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Banks and other financial institutions (OFIs) are beginning to see the need to explore cyber-insurance as a means of alleviating the impact of electronic payment fraud and other cyber-crimes in the country.

The increase in cyber-attacks along with its wider impact has led insurers’ clients and insurers to rethink the knock-on effect on other insurance lines like personal, property, intellectual property insurance.

The Minister of Communications, Adebayo Shittu, said Nigeria was losing 0.08% of its Gross Domestic Product (GDP) to cyber-crimes and the figure might have risen because a large number of incidents were undetected or unreported.

In 2016, he said, Nigeria lost $450 million to cyber-attacks alone and the trend has been on the rise since then. According to him, a total of about 3,500 cyber-attacks were launched on the country in 2017, 75 percent of which were successful, which led to a loss of about $500 million.

“Available statistics put the cost of cyber crime globally at over $700 billion per year, and it is projected to rise to about $2 trillion by 2019, due to the rapid digitization of consumer lives and company records,”  adding that “the number of incidents in 2016 grew by 38 percent  as against the number reported in 2015.”

Shittu said the prevalence of electronic commerce and online malls was giving cyber criminals opportunity to attack unsuspecting Nigerians. He lamented the shortage of cyber security experts in Nigeria, warning that it could expose the country to cyber danger.

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