Despite the raw unpredictability of a cyber event, there are real steps to take to mitigate risk and continue to grow market share. (Credit: Den Rise/Shutterstock)
Cyber insurance presents a once-in-a-century opportunity for the insurance industry to expand into a totally new product line. Demand for cyber coverage will only increase as the world becomes increasingly digital, creating more opportunities for cyber breaches. As the Organization for Economic Co-operation and Development concluded: "increasing digitalization will ensure that this [cyber] risk will remain top-of-the-agenda for the foreseeable future."
Though cyber risk is becoming a greater concern for businesses, the protection gap, and therefore the market opportunity, is still large. Lloyd's researched the effects of a three-day disruption to a cloud service provider and concluded that this type of massive single event could impact 12.5 million businesses and cause $19 billion in losses; it also revealed a massive protection gap since insured losses from that event would range from $3-3.5 billion.
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