The Sunday News
Shepias Dube
A LOCAL company, FBC Reinsurance Limited, has introduced an insurance policy which covers businesses against cyber risks and terrorism.
FBC Holdings head of marketing Ms Priscilla Sadomba said the global rise in cases of terrorism attacks and cyber crimes demanded that businesses be protected from such risks.
“Insurance does not have to provide cover against that which has already happened but against that which there is a risk or the smallest chance that it can happen.
“Zimbabwe is not immune to that potential and investors are now keen in ensuring that their investments are protected against such risks. If no coverage is provided by a Zimbabwean entity, this is a premium that is potentially paid to external insurers to cover local assets. It is therefore best to develop local skills and retain as much premium locally,” she said
Ms Sadomba said several leading African reinsurers had created capacity to underwrite terrorism risks on the African continent and FBC has seen it imperative to extend its availability to the Zimbabwean market.
Ms Sadomba said it was against this background that the company has put in place retrocession arrangements with top-rated specialist markets covering businesses against risks associated with political riots and terrorism, as well as cyber risks.
“The specialist markets are varied. On the cyber risk we mainly deal with the Lloyds market as well as underwriting managers who specialise in writing cyber insurance cover.”
She said cover was provided by either South African or European Entities, depending on the size and nature of risk.
Ms Sadomba said while the Zimbabwean market had not yet been affected by terrorism it was prone to cyber risk given the increase in use of plastic money and international credit/debit cards like Visa and MasterCard.
The country also uses the United States dollar which is a very attractive currency to cyber criminals.
She said the boom in the use of mobile money transfer and internet banking activities also required protection from theft just as insurance has traditionally protected physical money.
“Hacking activities are a common incidence and people have suffered losses due to these activities. The cost of data reconstruction is often quite huge and without this kind of insurance some entities have failed to bounce back after an attack,” she said.
Cyber insurance provides coverage for liability to third parties after an attack especially where your identity is used to cause them to behave in a particular fashion leading to loss of money.
It further covers data recovery costs as well as crisis management expenses.
The policy which is the first of its kind in Zimbabwe will also pay for the legal costs to defend oneself or the company in instances where there has been a network breach and privacy of clients has been compromised.
Ms Sadomba said the entry of her organisation into this segment would go a long way in protecting investments in the country and the benefits outweighed premiums.
“It may be necessary for the public to realise that these products provide coverage against risks that can threaten the existence of companies. The premiums are usually quite low compared to the risks involved with the majority of risks charged below one percent of limit of liability on cyber risks and below 0,5 percent on political and terrorism risks,” she said.
