The cyber risk insurance market is experiencing rapid development, with the rise of global gross written premiums from $850 million in 2012 to an estimated $2.5 billion in 2014, revealed a new report from Timetric. A growing number of cyber attacks and the increasing reliance of businesses upon technology for operational capabilities and storing data are responsible for the traction the cyber risk insurance market is gaining. But insurance firms are responding slowly to this rising demand, and there is still a number of imperfections in the market that is leading to a sub-optimal outcome.
Could compulsory cyber risk insurance become a reality?
"Total global losses from cyber-crime stood at $445 billion as of June 2014. With governments becoming increasingly involved in cyber threats, the prospect of compulsory cyber risk insurance could become a reality. It would have a transformative impact upon the market and could create a strong source of future revenues for non-life insurers," comments Jay Patel, insurance analyst at Timetric.
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Trudy Knockless
Trudy Knockless is a reporter on ALM Media's Business of Law desk. She has a background serving legal and insurance publications. Contact her at [email protected] or on LinkedIn at Trudy Knockless.
