Cyber Brief Shows Continued Growth into 2020

As insurance is increasingly connected to technology and the world becomes more digital, cyber insurance is necessary to protect businesses and organizations against ever evolving risks. An increase in ransomware claims made them the most frequently reported claim in 2019, with data suggesting that an organization will fall victim to ransomware every 14 seconds, according to a report by risk and reinsurance specialist Guy Carpenter.

In a brief on cyber in 2019 and its outlook in 2020, the company found that increased risk and the rising costs of regulatory action have led some to purchase cyber insurance for the first time, which is contributing to increased cyber sales. Additionally, those who already have cyber coverage may be reassessing their policies to determine the adequacy of current limits.

In the industry, there has been a push to clarify cyber coverage on non-traditional policies with the goal of eliminating silent cyber uncertainty. Many have purchased standalone cyber policies in response as they realize their traditional policies may not have provided the coverage they assumed they had. To address silent cyber coverage in its market, Lloyd’s of London has mandated that all policies clearly state whether cyber coverage is provided or not.

Moving forward, the cyber insurance market is predicted to continue growing, and pricing for cyber coverage is already beginning to increase. Cyber attacks are changing and technology is emerging that poses new risks, but the insurance market has responded by addressing protection gaps and clarifying cyber coverage. As the year continues, other solutions may emerge in response to cyber risk.

The full report can be viewed on the Guy Carpenter website.