Technology market intelligence company ABI Research predicts the cyber-insurance market to reach $10 billion by 2020.
“The amount would still comprise a small portion of the overall global insurance market but the compound annual growth rate of 36.6 percent is “highly dynamic,” said ABI Research, in a statement promoting its report,Cyber Risk, Liability and Insurance. Rising costs of cyberattacks and breaches are the primary driver of the predicted cyber-insurance market growth within the next five years. This will lead to an increase in risk transfer to carriers.
“More information sharing, understanding of event impact and the associated longer-term costs—through post-incident analytics, for example—can help remove some of these obstacles,” said Michela Menting, research director. “In turn this will driver better policy rates and see the cyber insurance market progressively emerge from its niche, despite being around for over 30 years.”
It is difficult for insurers to value data or systems, ABI said. Currently, a lack of actuarial data on cyber is a barrier to growth. Less than 20 percent of large enterprises use cyber insurance. The penetration drops to less than 6 percent for small- and medium-sized business, said ABI Research.
Insurers Ace, AIG, Allianz, AXA, Liberty International, Lloyds of London, Marsh & McLennan, Scottsdale and Zurich NA participated in the research.
Chad Hemenway is Managing Editor of Advisen News. He has more than 15 years of journalist experience at a variety of online, daily, and weekly publications. He has covered P&C insurance news since 2007, and he has experience writing about all P&C lines as well as regulation and litigation. Chad won a Jesse H. Neal Award for Best Single Article in 2014 for his coverage of the insurance implications of traumatic brain injuries and Best News Coverage in 2013 for coverage of Superstorm Sandy. Contact Chad at 212.897.4824 or [email protected].
