By Favour Nnabugwu
The global cyber insurance premiums are forecast to increase by a further 27 percent in 2021 to reach almost $9bn of gross written premium.
The cyber unsurance grew by 34 percent last year after slow growth of just 4% in 2019, with gross written premiums topping $7bn in 2020
Strong double-digit premium increases will drive the cyber insurance market to $20.6bn by 2025, GlobalData says, adding that the market is expected to “thrive” after Covid-19 as demand takes off.
“Cybersecurity was thrust into the spotlight in 2020 as the Covid-19 pandemic forced businesses to digitalise their processes and adopt remote working practices overnight,” GlobalData states.
It adds that cybercriminals were quick to exploit global panic and highlighted the need for businesses to have insurance protection in place.
“But the market is not as easy to navigate as it once was,” GlobalData says. Up to now, buyers have had the pick of the market as new capacity clamoured for business, coupled with flat rates and high levels of cover.
But GlobalData says the market has fundamentally changed in the aftermath of Covid-19, along with the associated increase in cyber risks and exposure to large losses.
Ben Carey-Evans, insurance analyst at GlobalData, commented: “Covid-19 has also brought about a permanent shift in the way businesses and consumers operate, with remote working practices set to stay and digital consumer channels seeing more use than before the pandemic.
This lasting shift in behaviour will push the demand for both commercial cyber insurance and, to a lesser extent, personal cyber insurance in the coming years.”
Today’s buyers are facing tighter restrictions on cyber cover and higher premium rates, but Mr Carey-Evans said the cyber insurance market is expected to continue on a strong growth trajectory during the next five years.
“The need for robust cybersecurity and cyber insurance is becoming apparent to businesses of all types and sizes, as the frequency and severity of cyberattacks continues to rise,” he said.