Cyber attacks are on the rise. Hackers are increasingly looking to take advantage of vulnerabilities to steal valuable customer data, including financial details and personal information. For corporations, the impact of these attacks goes far beyond data loss.
Today, businesses struggle to identify, assess vulnerability and respond to digital threats and cyber attacks. This is a significant gap — and one that insurers can help bridge.
The cyber insurance market is a small but growing fast. Allianz estimates that cyber insurance currently represents about US$2 billion in premiums worldwide, with the US market accounting for approximately 90%.
Despite the scale of the opportunity, providing cyber insurance is not without complications.
While most insurance products are based on decades of actuarially sound, aggregated, and shared data, cyber insurance is more risky. Not only is this type of insurance far newer, but the information surrounding associated risks and vulnerabilities is also more segregated.
Another factor to consider is that, as businesses in possession of significant volumes of sensitive customer data, insurance companies are themselves prime targets. As insurers transform legacy systems and manual processes to become more reliant on new technologies the corresponding risk of attack grows.
Cyber insurance is a rapidly growing segment of the insurance market. Insurers that take key steps now can quickly find themselves at the forefront of this increasingly necessary market.