Cyber insurance in 2024: Prices down, coverages expand
Selling cyber insurance is easier than it used to be. The hard part is aligning clients with the right terms and protection.
Over the last two decades, cyber insurance has gone from a product companies begrudgingly considered buying to a business necessity, the effectiveness of which can make or break an enterprise after a data breach.
David Derigiotis, brokerage president at the specialty insurer Flow, explained this evolution in a recent interview with PropertyCasualty360 about the firm’s Cyber Insurance Mid-Year State of the Market Report.
“We’ve become more digital, and we’ve become more connected,” Derigiotis said of the current cybersecurity landscape. “More of what we do is dependent on supply chain, other vendors and cloud-service providers. So the breaches have become more severe. They’ve become more publicized, and people are much more aware of the risks.”
Now, the average cost of a breach has reached $4.45 million, Flow reports. It follows that cyber insurance sales are becoming more brisk. The global cyber insurance market grew from $16.66 billion in 2023 to $20.88 billion in 2024 and is projected to reach $120.47 billion by 2032, according to Flow and Munich Re.
As proof of just how far the market has come in a short time, take a listen to the 2022 Insurance Speak podcast episode pasted above, featuring a conversation between former Claims magazine Editor Patricia Harman and Tim Zeilman, global cyber product owner at HSB.
Finding the right cyber protection
Cyber insurance may be easier to sell these days, but challenges arise when making sure each client has the right coverage to meet their needs, Derigiotis said.
Today’s cyber insurance policies are proactive, as opposed to traditional insurance, which is “purely financial risk transfer,” he added. Some of the benefits of modern cyber insurance policies include digital footprint scans, employee training, phishing awareness, compliance assistance and guidance drafting privacy policies.
“You really cannot take a cookie-cutter approach to cyber risk,” Derigiotis concluded. “There’s a lot of variation in terms of what carriers are willing to offer, the way their insuring agreements read, and the resources that come along with it… You have to align the client that you have with the marketplace in terms of what they’re willing to offer, the resources and the coverage.”
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