Still, the market remains primarily untapped, despite the tremendous potential it holds.
It may not come as a shock to anybody that the cyber insurance marketplace is taking off and that it was recently estimated that by the year 2020, it will be worth about $10 billion, but what is shocking is the speed that it will reach in order to get there.
The growth rate that it has been achieving has made it the top product in the commercial insurance sector.
The forecast of the worth of the cyber insurance market was recently issued by ABI Research. That said, while this will represent only a tiny sliver of the overall worldwide insurance marketplace, it is the rate of growth that is the most notable. The primary driving force behind this exceptional growth rate is the rise in costs that are linked with data breaches and cyber attacks. According to Michela Menting, ABI research director, the situation is reaching the point that it is too expensive for businesses to be able to ignore the costs of cyber attacks and they are being forced to buy the insurance policies to protect themselves.
The cyber insurance market is stepping out of being in a niche position and is becoming mainstream.
Menting stated that “More information sharing, and understanding of event impact and the associated longer-term costs (through post-incident analytics, for example)…will drive better policy rates and see the cyber insurance market progressively emerge from its niche, despite being around for over 30 years.”
Though there is considerable potential to provide insurance agents with a notable benefit, at the moment, many are still finding it challenging to sell these policies, particularly when it comes to small businesses.
The data from ABI Research also pointed out that among large companies, a surprisingly small percentage has actually purchased the coverage, so far. It has been estimated that under 20 percent of big businesses have cyber liability insurance, and less than 6 percent of small to medium sized companies have this protection.
There are many reasons that business owners continue to hesitate to purchase cyber insurance. Among smaller companies, the largest concern is the cost of the coverage. However, many also have doubts that they would ever actually receive payment for a claim if one was ever filed.