The drivers underpinning growth in the US will contribute to the growth in other parts of the world, with a focus on the upcoming European market
US: Aon Inpoint estimates the US standalone market to grow from USD1.5bn in 2015 to USD5.6bn in 2020.
Key growth drivers: legislation, number of breaches, increased awareness and higher costs.
Europe: European premium is estimated at USD135million for 2015 for the standalone cyber market (hence not including premium for bundled cover) – with the Global Data Protection Regulation expected to act as a catalyst for further growth.
A few insurers have been able to build significant presence in the market but face imminent challenge as more and more are now competing in this space
More domestic insurers are developing primary offerings to compete with London players.
The cyber market has seen staggering yearly growth levels of 30% year on year.
Customer needs and covers are developing and bringing new opportunities
2016 saw dramatic changes in capacity for personally identifiable information (PII).
Two years ago, the largest PII programmes were approximately USD300m in total capacity but this increased in 2016 where a number of programs with USD500m in aggregate limit were built for financial institutions and FinTech companies.
Demand extended beyond data breach cover to also financial losses and property damage resulting from system failure or cyber incident.
The reinsurance market is playing its part in supporting cyber insurers
Aon Benfield indicates that USD525m of reinsurance premium was placed globally in 2015 with 95% written via quota share programs.
The expectation is that there will be more standalone cyber treaties in the future due to increased availability of modeling data and developing underwriting capability.
Also more reinsurers are expected to start underwriting cyber.
Key players have looked beyond the insurance market to identify growth opportunities.
• Global revenue generated from cyber services (from risk mitigation to risk transfer and post-incident solutions) is estimated to be in excess of USD100bn for 2015.
Michael R. Moran, Chief Executive Officer of Aon Inpoint, commented: “We live in a continually evolving digital and technology inter-connected environment, where companies face challenges keeping up with the latest security solutions. This leaves them more exposed to potential cyber-attacks and related threats than ever before. In this context, the insurance industry will play an important role in helping companies manage their exposure to potential cyber perils and new risks through both existing and still-to-be developed solutions. “It is key for insurers to actively develop a strategy, establish partnerships with cyber security firms and look to knowledgeable experts outside the insurance industry to build a competitive edge. An understanding of these current and emerging risks, clear strategy and rapid positioning are essential for success.”
View the full report by clicking the title Global Cyber Market Overview: Uncover the hidden opportunities
|
