In response to the alarming rise in cyber fraud cases across India, the Ministry of Finance has directed public sector insurance companies to design and roll out cyber insurance products aimed at protecting consumers from digital threats.
Finance Minister Nirmala Sitharaman highlighted the growing need for consumer protection against phishing, identity theft, UPI frauds, and unauthorized digital transactions. The directive comes amid reports that insurance frauds alone touched ₹1.77 billion in FY24, nearly doubling from the previous year.
The Ministry emphasized the importance of digital-first insurance solutions and encouraged insurers to:
Develop affordable cyber insurance offerings
Strengthen social media outreach
Resolve customer grievances quickly and transparently
Innovate products tailored to evolving cyber threats
Despite India’s rapid digital transformation, the country’s general insurance penetration remains low at 1% of GDP—far below the global average of 4.2%. The push for cyber insurance is seen as a timely move to close this protection gap and enhance consumer trust in the digital ecosystem.
This marks a crucial step in strengthening India's digital financial infrastructure, as cyber threats continue to grow in frequency and sophistication.
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