As the cyber insurance market develops alongside rising online crime, data and analytics firm GlobalData says personal cyber insurance could be adopted by the general public, significantly increasing demand for cyber cover.
Personal cyber products are currently offered by AIG and Hiscox, who offer cyber protection for high net worth (HNW) individuals.
However, as the threat of cybercrime and data breaches continues to grow and impact individuals as well as firms, personal cyber products could be expanded to match the wider public’s demand for protection.
This year has seen a proliferation of global systemic cyber attacks and data breaches, which have raised firm’s and the public’s awareness of their vulnerability to cybercrime.
The high-profile Equifax hack, which exposed personal details of nearly 700,000 UK customers and 143 million Americans, has become the latest example of the risk facing individuals online data.
GlobalData said this is compounded by the finding that all Wi-Fi connections can be hacked due to flaws in universally used security protocol that was previously thought to be secure.
Daniel Pearce, Financial Analyst at GlobalData, said; “such developments could lead to personal cyber insurance policies becoming a necessity in the coming years.”
“The cover will aim to provide HNW customers with support by investigating and rectifying any damage caused to their device, locating and removing viruses, as well as providing professional consultation in order to prevent future cyber-attacks.
“In addition customers can upgrade to a more comprehensive policy with a limit of £100,000, which will also insure payments liable as a result of an attack, misuse of personal data, and ransomware,” Pearce explained.
In the U.S., Munich Re’s Hartford Steam Boiler Inspection and Insurance Company offers cyber cover.
Oak Underwriting recently announced that it will include cover for cyber-crime within its legal expenses and home emergency cover, through a partnership with Das.
Although such products will initially only be offered as add-ons, Globaldata believes the potential to offer cyber insurance as a standalone policy will emerge over time, as the market develops and demand increases.
Pearce said there’s potential for cyber cover to expand to include policies that can be purchased alongside new gadgets, allowing for premium prices to be more specific and reflect the level of risk posed by each gadget.
The cyber insurance market has been forecast to reach almost $17 billion by 2023, growing over 20% CAGR between 2017-2023, according to P&S Market Research Global.
So far the Banking Financial Services and Insurance sector has been the largest consumer of cyber insurance, as these companies are more prone to cyber-attacks – accounting for over 35% of the global market share in 2016.
However with global businesses increasingly shifting towards intangible assets and business models based on cloud sharing and online platforms, re/insurers have just tapped the surface of the potential cyber insurance market.
