Data breaches and other cyber attacks are growing in frequency and size, boosting coverage need.
The cyber insurance market will reach more than 8 billion dollars by 2020, representing a doubling from its 2017 figure, says Munich Re.
Cyber attacks making major headlines are rapidly becoming more dramatic and damaging.
Among the most damaging cyber attacks organizations have seen over recent months and years include WannaCry and NotPetra. These malwares had a significant economic impact as they infected hundreds of thousands of devices last year. These high profile attacks have driven large organizations to take a closer look at the cyber insurance market.
These organizations have been considering cyber insurance policies, purchasing coverage for the first time, or broadening the protection they already had in pace. As a result, Munich Re expects that by two years from now, the market for this cyber insurance protection will have doubled, according to a Phys.org report on a reinsurers annual meeting. Munich Re’s data was shared by Torsten Jeworrek, a board member at the reinsurance company. He spoke on the first day of the meeting.
Last year, the cyber insurance market was estimated to be worth about $3.4 to $4 billion.
Munich Re expects that cyber insurance will grow to $8 billion to $9 billion by 2020. Though there has been an increase in productivity levels within the digital economy, “increased networking of machines, and equipment in particular, can also give rise to very complex risks such as data theft, disruptions in the interaction between networked machines, and even the failure of entire production lines and supply chains,” said Munich Re.
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The reinsurance company predicts that the number of connected devices will have grown from 27 billion in 2017 to reach a considerably higher 125 billion by 2030.
“The economic costs of large-scale cyber attacks already exceeds losses caused by natural disasters. Where small and medium-sized enterprises are affected, such attacks can soon threaten their very existence,” cautioned the reinsurer.
Malware has proven to be the most damaging digital attacks but have drawn the most attention to the cyber insurance market and the products within it. WannaCry and NotPetra encrypted data on hundreds of thousands of hard drives and functioned as ransomeware. In those cases, computer users receive ransom demands that they must pay in order to regain access to their machines.