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Cyber insurance is a potentially huge, but still largely untapped opportunity for insurers and reinsurers. We estimate that annual gross written premiums are set to grow from around $2.5 billion today to reach $7.5 billion by the end of the decade.
Businesses across all sectors are beginning to recognise the importance of cyber insurance in today’s increasingly complex and high risk digital landscape. In turn, many insurers and reinsurers are looking to take advantage of what they see as a rare opportunity to secure high margins in an otherwise soft market. Yet many others are still wary of cyber risk. But, how long can they remain on the side-lines?
Cyber insurance could soon become a client expectation and insurers that are unwilling to embrace it risk losing out on other business if cyber products don’t form part of their offering. In the meantime, many insurers face considerable cyber exposures within their technology, errors & omissions, general liability and other existing business lines.
Cyber criminals are constantly probing for weaknesses and adapting their tactics. And while our image of the perpetrators often centres on activists or organised gangs, they could just as easily be employees. The targets are also broadening. A clear example came from the insurance sector itself when a company was hacked for the tracking data they held on cargo shipments.
All these factors make cybercrime a costly, hard to detect and difficult to combat threat. From an insurance perspective, while analogies are often made with terrorism or catastrophe risks, cyber risk is in many ways a risk like no other.
Partner, London Market Leader, United Kingdom
Tel: +44 (0) 207 212 3085
Insurance Markets Leader PwC (Germany)
Tel: +49 (211) 981 1496