Cyber insurance market to touch $7.5 bn globally by 2020: PwC report

The report also showed that 7% of insurance CEOs and 79% of banking CEOs perceive it as a future growth threat

The global cyber insurance market could grow to $5 billion (about Rs 33,000 crore) in annual premiums by 2018 and at least $7.5 billion (about Rs 49,500 crore) by the end of the decade, according to a new report issued by PwC. The report titled "Insurance 2020 & Beyond: Reaping the Dividends of Cyber Resilience' said that said that 61 per cent of business leaders across all industries see cyber attacks as a threat to growth.

The report also showed that 71 per cent of insurance CEOs and 79 per cent of banking CEOs (the highest of any sector) perceive it as a future growth threat. Respondents also ranked it higher than shifts in consumer behaviour, the speed of technological change and supply chain disruption.

 

Anuraag Sunder, Director, PwC India said: "Cyber Insurance remains a looming risk with steep under penetration in India. Anecdotal data suggests that the number of cyber policies sold would be in the vicinity of 150 or so. As ITeS, retail, healthcare and related sectors grow cyber insurance for suitable customer data protection become crucial."

He explained that in FY11 India was the 10th most heavily cyber-attacked country in the world, last year it was second only to United States. With the leading general insurers providing coverage in the country for cyber, Sunder added that uptake of such products has huge potential.

Previous PwC research revealed that 61 per cent of business leaders across all industries see cyber attacks as a threat to the growth of their business, and 2014 saw an average of 100,000 global security incidents a day.

As a solution PwC suggests that insurers, reinsurers and brokers can capitalise on the cyber risk opportunity whilst managing the exposures by maintaining their own cyber risk management credibility through effective in-house safeguards against cyber attacks. It also said that they making coverage conditional on a full and frequent assessment of policyholder vulnerabilities and agreement to follow agreed prevention and detection steps.