I posed this question at the end of September this year - somewhat provocatively.
Almost everyone agrees Cyber Insurance is both important and an opportunity for new data and analytics companies. Most companies still believe they don't have adequate cover. Yet insurance rates are declining and there is a push for terms to be extended. How should insurers embrace this opportunity without exposing themselves to massive aggregations of future loss?
The risk of cyber is rising steadily. The University of Cambridge Centre for Risk Studies has just released its 2019 Global Index allowing us to measure cyber in the context of 22 other global threats. Cyber risk is up 9% in the last year, and moves to up to 6th place amongst the threats assessed.
The understanding of cyber risk and insurance to address is also evolving rapidly. The article generated a lot of interest and debate as did our Instech London evening event on 8th October (Sponsored by Illumio). If you missed the article first time round, take a look to read what others in the industry are saying and how companies like CyberCube (one or newest Instech London corporate members) are helping insurers assess the risk. And the videos from our event are online at https://www.instech.london/videos/
We’ll hit $4bn in cyber insurance premium by end of this year. Allianz has predicted this growing to $20bn by 2025. And most industry commentators believe 30% – 40% annual growth will continue for the next few years. A line of business growing at over 30% per year, with combined ratios around 60% at a time when insurers are struggling to find new sources of income is not to be sniffed at. And the risks are getting bigger. In 2017, the total global economic loss from cyber attacks was $1.5tn according to Cambridge University Centre for Risk Studies. But only 15% of that was insured.