The cyber insurance market has the potential to rival the size of other major P/C lines if three key challenges can be successfully navigated, according to a report from Howden. Future growth and relevance of cyber cover, it says, now centres around penetrating new markets (particularly SMEs), addressing systemic risk and expanding available capital.
If all three of these factors can be successfully navigated, the cyber market could reach US$50bn by 2030, according to the broker.
Sarah Neild, head of UK cyber retail at Howden, said: “Getting this right is crucial for the sustainability of the cyber market. By providing a framework designed specifically for cyber’s unique risk profile, clients will be offered more certainty around the parameters of cover and what is insurable and what is not. The process of defining the limits of cover specific to cyber acts of war will help to fulfil the potential of this market, but only if the clauses are fit for purpose and clients’ needs are met.
“With one of the largest global reinsurers steadfast on the application of their war language, wider adoption seems inevitable, despite carriers’ disparate views on what adoption should look like. Increased uniformity on this topic would ultimately help the market secure relevance for the long term.”
