Recently, cyber attack incidents have occurred frequently, including Munich Re AG and Chubb Ltd. Insurance companies within are seizing this rapidly expanding market opportunity, while prompting enterprises to reevaluate online insurance premiums. Munich Re predicts that as artificial intelligence intensifies the widespread and destructive nature of attacks, the global cyber insurance market size will increase from 15.3 billion US dollars in 2024 to 16.3 billion US dollars in 2025, and is expected to double to 30 billion US dollars by 2030, with an average annual growth rate of over 10%.
According to Cyber Security Ventures, the losses caused by global hacking crimes in 2024 are expected to reach 9.5 trillion US dollars, much higher than 600 billion US dollars in 2018. However, the vast majority of risks remain uninsured. The latest victim, British retailer Marks & Spencer, faced a loss of 300 million pounds in operating profit due to the hacking attack it suffered in April, and its share price was also severely hit. This incident once again highlights the importance of online insurance.
Beazley Plc, a pioneer in cyber insurance, said that high-profile attack incidents often trigger a surge in enterprise demand. Sydonie Williams, its director of international cyber risk, pointed out that shareholders’ growing concern about cyber security has driven enterprises’ willingness to take out insurance. Although online insurance has been around for decades, it has become a growth engine for the insurance industry since 2019-2020. Ransomware attacks and the digitalization process have accelerated this trend.
Analysts believe that the M&S incident may prompt more enterprises to purchase or upgrade insurance policies. Adam Casey, an expert from Qodea, said that such large claims would prompt insurance companies to strictly review the terms or drive up the trend of premiums. At present, less than half of the enterprises in the FTSE 100 index have online insurance, and the coverage rate of small and medium-sized enterprises is even lower than 10%, indicating the huge market potential.
In addition to providing traditional protection, insurance companies also help enterprises optimize security measures through their internal network teams, forming a virtuous cycle of “reducing risks – lowering premiums”. As cyber risks have risen to the top of the most urgent issues for enterprises, cyber insurance may become the mainstream risk management tool.
Related Topic:
