Cyber Insurance Spend Expected to Triple by 2020

Oct 22, 2015

  1. Brian Anderson
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    Brian Anderson Executive Editor

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    U.S. businesses spent more than $2 billion for cyber insurance last year as interest in this coverage grew dramatically following numerous high profile data breaches. Some estimates, including one from PwC, suggest the cyber insurance market could more than triple to $7.5B in premiums by 2020.

    More than 60 carriers now offer stand-alone cyber insurance policies, and the I.I.I. has a new white paper (link below) that takes a look at where the threats are coming from and the challenges cyber insurers face in writing this coverage given the rapidly evolving nature of cyber attacks.

    I hear a lot about the increasing popularity of cyber insurance in the trade and even mainstream media, but haven’t heard much from agents actually selling it. Anyone with experience selling cyber insurance care to share their experience with it – do you see a lot of potential out there?

    Cyber Risks: Threat and Opportunities | III
     
  2. thecommercialguy
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    thecommercialguy Expert

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    Brian - I work with middle market clients in Los Angeles CA. We haven't had much success selling Cyber related products since the clients we are mainly prospecting have not had too much risk handling client data (eg. credit card info, etc). However, as you would well know, the client risk still remains in that data breaches/hacks that could dilute the integrity of their data bases could very well easily affect the integrity of their books, quickly turning into tax liability and other regulatory issues.

    The main driver preventing our commercial clients from purchasing it is 1) as mentioned above, and 2) the cost. The inability to quantify the quantitative risk associated with cyber as simply as property insurance (coverage for X value can be purchased as Y premium on Z rate) makes it difficult for our teams to move forward with any productive conversations. To be honest, our teams are still unclear as to how one should quantify the risk and present them. The usual 1M or 2M type GL limits would be shooting in the dark and we don't want to be irresponsible either.

    Let us know your thoughts. I hope others can chime in.

    Hayato
    closingcommercial.com
     
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