Cyber incidents are the most important business risk globally, and businesses both large and small need to protect themselves as much as they can. Cyber insurance can protect entities against these risks by providing a holistic approach that consists of identifying potential areas of attack, providing monetary compensation in the event of an attack, and helping businesses get back on their feet as quickly as possible.
Top macroeconomic trends impacting the cyber insurance industry, as identified by GlobalData.
Growth in business numbers
Currently the cyber insurance (CI) market is focusing products towards the commercial sector. Given this, the number of businesses operating is a key element of the underlying demand in the market. In the UK alone the number of private businesses with 1+ employees grew by 16% between 2012 and 2018 according to the Department for Business, Energy & Industrial Strategy. On a wider scale, the number of active businesses in the EU increased by 28.6% between 2012 and 2017 according to official EU statistics.
However, despite increasing business numbers, growth in the market is yet to reach its full potential. Many new businesses feel they are too small to be vulnerable to cyber risks, and thus believe CI is not appropriate or necessary. About 44% of UK SMEs believe they will not be the target of a cyber-attack according to GlobalData’s 2019 UK SME Insurance Survey, reinforcing this observation. Insurers and brokers should be proactive about identifying areas and industries that may be unaware about CI and educating those businesses about the protection the product can provide.
Shifting consumer behaviour
Consumer purchasing behaviour will play a considerable role in accelerating growth in the commercial cyber insurance market. Developed economies have seen a shift in the purchasing habits of consumers, with moves away from traditional br ..
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