Cyber insurance market demand may rise as new threats emerge

In its report, Cyberattacks Offer Growth Market for Insurers,Bloomberg Intelligence (BI) notes that cyber-insurance provider Beazley sees 18% compound annual growth for that cover in 2024–30, while Hiscox, AXIS Capital, Chubb and Munich Re also expect rising demand.

Kevin Ryan, Senior Insurance Analyst at Bloomberg Intelligence, explained the background behind these forecasts: “UnitedHealthcare’s Change Healthcare medical billing processor, which links one third of Americans to health insurance payments, suffered a cyberattack in February, crippling the payments systems of a significant number of hospitals. The May attack on Ticketmaster compromising 560 million customer records is a further example of the unrelenting cybercrime challenge.

“An estimated US$8 trillion was lost globally to cybercrime in 2023, according to technology consultants Cybersecurity Ventures, a significant increase versus the $600 billion McAfee estimated in 2018. It’s clear the seriousness of attacks is increasing. As such, Allianz has said that cyber risk is the number one concern globally, along with business interruption.”

Following more than 317 million ransomware attacks globally in 2023, consultant SonicWall monitored a 36% decline in ransomware attacks year on year (but an 11% rise in global malware attacks). The decline reflects both slowing economic activity and wins against ransomware perpetrators, according to BI.

Though insurers saw strong rises in cyber-insurance premium rates in 2022, these are now slowing, with Beazley’s 2023 cyber rates falling 5% following a 40% rise in 2022, noted BI. In mature markets, such as the US and Europe, cyber insurance may be one of the few areas of insurance to record real growth.

Ryan concluded: “Insurers have the infrastructure to work collaboratively with clients and provide services before and after malware incidents, thus minimising potentially negative outcomes. Cyber threats and infiltration techniques are moving to more sustained levels – known as ‘advanced persistent threats’ – away from quick, one-off acts.”

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