As organizations in Nigeria become more reliant on data and more of their businesses conducted over digital channels, there is an increasing need to protect that data and those channels from cyber-attacks – creating a massive opportunity for the cyber insurance market.
The cyber insurance market is booming due to rising cyber-attacks, but insurance organizations will need to become much more sophisticated in their approach to assessing and managing cyber risk if they hope to turn cyber policies into a strong and sustainable line of business.
The Cyber insurance is among the fastest-growing niches in the industry today. According to recent studies by KPMG, one of the largest professional services companies in the world, “Companies are increasingly seeking cyber breach insurance products that cover the management and costs of notification processes”.
As fledgling digital economies take off in Kenya, South Africa, and Nigeria, local cybercriminals have emerged and are organizing themselves to take advantage of regional financial services including the nascent and highly popular mobile money industry.
Nigeria, a nation with the highest internet population in Africa, is a major attraction for hackers, as billions of dollars are now being siphoned electronically to offshore bank accounts, whilst critical data are stolen and sold on the ‘cyber black market’.
Between year 2000 and 2013, Nigerian banks have lost an estimated N159 billion to cyber crimes, says the Nigerian Inter-Bank Settlements Systems (NIBSS).
There has been recent spike in incidences of cyber attacks on websites of ministries, departments and agencies (MDAs) of government. In recent months, hackers and cyber thieves attacked prominent government websites including the Economic and Financial Crimes Commission (EFCC), the Central Bank of Nigeria (CBN) as well as the Ministry of Science and Technology (MST), casting a dark cloud on the country’s e-governance push. Energy sector attacks are seeing a spectacular rise in illegitimate access and disruption through industrial control systems.
The Central Bank of Nigeria (CBN) had recently issued a policy that prevents certain financial information and data from being stored outside the shores of the country.
Recent research by ABI on Cybersecurity Strategies for Critical Infrastructure Market predicted that regional revenues for Sub-Saharan Africa (SSA) will hit $100 million in 2015.
SSA has a small but burgeoning cybersecurity market, which is set for dynamic growth over the next 5 years. The region is experiencing soaring Internet growth, boosted by tremendous mobile connectivity. This has outpaced any models experienced in the past by developed economies.
“Sub-Saharan Africa is a cyber-diamond in the rough,” says Michela Menting, cybersecurity practice director. “The region has the opportunity to integrate cybersecurity into these early stages of its ICT build-out and the potential of aligning itself quickly with cyber-readiness levels in developed economies.
The uniqueness of the market not only means that thousands of people will connect to the Internet for the first time in their lives, but also that they are extremely vulnerable online.
According to a report titled, ‘The Cybersecurity Risk Paradox’ by Microsoft Security Intelligence Report (SIR), “countries with a developing level of Information Communications Technology (ICT) may be unprepared to secure their ICT infrastructure commensurate with the increase in citizen use of Personal Computer (PC) systems”.
This, the report states, provides greater opportunity for malware to spread unchecked. The report revealed that while increased Internet access and more mature technological development is correlated with improvement in cyber security at the global level, it has the opposite effect among countries with developing economies and lower levels of technological development.
National support for cybersecurity across the SSA region remains poor; hence the market is primarily dependent on foreign security vendors to offer basic online protection.
Amid the Nigerian Presidency’s failure to expedite action on the final passage of the Cybercrime Bill, major sectors of the economy, including oil and gas, telecommunications, banking, is being exposed to the exploits of cybercriminals prowling the digital landscape, with no form of restriction, industry observers have said. Regulation, cost management and rising customer expectations for better service delivery, are compelling banks, mobile operators, as well as oil and gas companies to migrate services and critical data online.
DAN OJABO
