Cyber insurance sector to see continued robust growth
Despite some challenging years, cyber insurance is the fastest growing P&C segment, the Triple-I reports.
While cyber insurance accounted for just 1% of all property and casualty premiums in 2022, a year that saw direct written premiums (DWP) in the line reach $13 billion, the Insurance Information Institute (Triple-I) anticipates the sector to continue being one of the fastest-growing insurance segments in the years ahead. By 2027, cyber DWP is expected to surpass $33 billion.
Triple-I reported the growth is being spurred on by the ubiquitous nature of cyberattacks and the strides carriers have made in clarifying policy language. By clarifying coverage and exclusions, risk managers are better able to understand the value of cyber insurance and carriers can better manage costs and rates.
If the cyber market continues growing at its current pace, the sector will double in size every three years, according to Gallagher Re.
In addition to the market drivers outlined by Triple-I, Gallagher Re expects personal lines cyber coverage and further product diversification to propel the sector through the coming decade.
In addition, reinsurance is going to continue to be a vital piece in the cyber market’s future growth, Gallagher Re reported. As it stands, primary cyber insurance carriers cede more than half of their premiums to the reinsurance market.
This past year also saw a number of cyber catastrophe bonds hit the market, and Gallagher Re expects more of these types of insurance-linked securities to hit the market in 2024 as demand for cyber coverage grows.
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